GE and Lufkin Industries Inc. have announced a joint agreement whereby GE will acquire Lufkin Industries Inc., a leading provider of artificial lift technologies for the oil and gas industry and a manufacturer of industrial gears, for approximately US$3.3 billion. Lufkin shareholders will receive US$ 88.50 per share in cash for each of their Lufkin shares.
Lufkin will broaden GE Oil & Gas’ artificial lift capabilities beyond electric submersible pumps (ESPs) to include rod lift, gas lift, plunger lift, hydraulic lift, progressive cavity pumps and a sophisticated array of well automation and production optimisation controls and software. The ESP category of artificial lift is the only lift segment in which Lufkin does not currently compete.
The transaction is expected to close in the second half of 2013 subject to Lufkin shareholders’ approval, regulatory approvals and customary closing conditions.
In 2012, Lufkin posted record revenues of US$1.3 billion, which reflected growth of 37%. New business bookings in 2012 grew 38% companywide to US$1.3 billion year on year, driven by a 47% increase in its artificial lift business. With synergies from GE Oil & Gas’ global scale and broad array of solutions, GE believes the business is well positioned for significant top and bottom line growth.
Oil & Gas is GE’s fastest-growing business, and with the addition of Lufkin’s artificial lift products and automation and optimization solutions, GE can provide global exploration and production customers with a complete portfolio of offerings that address a wider variety of well types at all stages of the production lifecycle.
GE’s portfolio of turbomachinery equipment is used in mechanical-drive, compression and power-generation applications such as liquefying natural gas, moving hydrocarbons through pipelines or generating power via gas turbines at a production or industrial site. Lufkin’s suite of gears and bearings will complement GE’s existing product line and are currently in use on GE’s compressor and gas turbines. Lufkin will continue to sell these to the open market as it does today.
Adapted from press release by Callum O’Reilly
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/09042013/ge_oil_gas_acquires_lufkin_222/