Dive Brief:
- Siemens AG has agreed to acquire Dresser-Rand Group, a manufacturer of oilfield compressors, turbines and other rotating equipment, for $7.6 billion in cash.
- The acquisition, added to Siemens’ natural gas turbine and drilling equipment division, will grow the industrial conglomerate's oil and gas business.
- Analysts say the acquisition is in line with Siemens’ announced intent to increase its presence in the booming shale gas market in the U.S. and further capitalize on new fracking and drilling technologies, while Dresser-Rand is expected to benefit from access to Siemens offshore oil-drilling customers in need of its compressors.
Dive Insight:
The deal follows Siemens’ $1.3 billion acquisition of Rolls Royce’s civil energy operation, in which Siemens got access to new oil-and-gas extraction industry customers, and its unsuccessful effort to beat out General Electric for the purchase of natural gas turbine manufacturer Alstom.
Sources reported Morgan Stanley and Zaoui & Co. advised Dresser Rand while Goldman Sachs and Deutsche Bank advised Siemens in the deal.
Siemens’ all-cash offer reportedly gave it the edge over a bid from Swiss pump manufacturer Sulzer which, with the backing of Russian billionaire Viktor Vekselberg and his Renova Group’s access to Russia’s oil and gas markets, had pitched the idea as a merger of equals. Renova reportedly holds 5% of Dresser-Rand.
Siemens will pay $83 per share, a significant premium over the $80 share price at Friday’s NYSE closing and an even bigger premium over the $60 per share price in July, before speculation about the deal emerged.
