Siemens AG agreed to buy Dresser-Rand Group Inc. for $7.6bn (approximately £4.7bn) including debt as Europe’s largest engineering company expands its business with oil and gas equipment in the US.
Siemens will pay $83 (approximately £58) a share in cash, the Munich-based company said in a statement today. That is a premium of about 37pc to Dresser-Rand’s share price in July before reports about a potential bid boosted the stock.
The company has coveted Dresser-Rand, which makes compressors and turbines for the oil and gas industry, for at least three years.
Siemens Chief Executive Officer Joe Kaeser is seeking more deals in that industry after saying that the German engineering company had not made the most of the boom in shale gas extracted by hydraulic fracturing.
“The valuation is a stretch but strategically it makes sense,” said Volker Stoll, a Stuttgart-based analyst at Landesbank Baden-Wuerttemberg, who has a hold rating on the stock. “With the deal, the energy business will be strengthened, especially in the US where Siemens hasn’t been as strong.”
Sulzer, which last week said it was in non-exclusive talks with Dresser-Rand, today said it terminated the negotiations to focus on other M&A opportunities.
While Siemens said it expects to close the transaction by summer 2015, there is leeway for potential competing offers to be placed as the takeover must still be approved by Dresser-Rand shareholders.
more
{ 0 comments... » Siemens agrees to buy Dresser-Rand for $7.6bn read them below or add one }
Post a Comment