Germany’s Siemens will acquire U.S. oilfield equipment maker Dresser-Rand for $7.6 billion, the company announced on Monday.
The move will boost the German company’s oil and gas business particularly in the United States.
The Houston-based company is fetching $83 a share, in cash.
The German company won over Swiss rival Sulzer AG, which was also involved in talks with Dresser-Rand over a stock-based merger.
Morgan Stanley and Zaoui & Co. were the financial advisor of Dresser Rand, according to the company. Goldman Sachs and Deutsche Bank DBK. advised Siemens, as per the people familiar with the matter said.
However, the biggest acquisition in the history of the German industrial group is according to the bank an expensive deal compared to other transactions in the industry.
Dresser-Rand issued a statement saying that Siemens “plans to operate Dresser-Rand as the company’s oil and gas business retaining the Dresser-Rand brand name and its executive leadership team.”
“In addition, Siemens- Europe’s largest engineering company, intends to maintain a significant presence in Houston, which will be the headquarters location of the oil and gas business of Siemens.”
In a separate announcement on Monday, Siemens revealed its plans to sell a 50 per cent stake in BSH Bosch und Siemens Hausgeräte (BSH), its household appliances joint venture, to Bosch for €3bn. BSH is Europe’s largest producer of household appliances with about €10.5bn in annual revenues and 50,000 employees.
Joe Kaeser, Siemens chief executive, said Dresser-Rand was a “perfect fit for the Siemens portfolio”.
Such a tie-up is supported by the Russian billionaire Viktor Vekselberg’s Swiss investment firm Renova Group, which controls about a third of Sulzer and is reportedly having a near 5 percent stake in Dresser-Rand.
Lisa Davis, a managing board member of Siemens said: “Our aim is to become the leading rotating equipment and process system integrator for the oil and gas industry.
“Dresser-Rand has strong presence in oil and gas, a reputation for technology leadership and innovation, and a talented and experienced leadership team.”
Siemens is hopeful of completion of transaction by next summer.