General Electric Co. (NYSE:GE) chief executive officer Jeffrey Immelt has stated one of his primary goals for GE in the near term is to strengthen and expand their industrial businesses, and they've taken one of the steps to do that by acquiring the maker of equipment for oil fields, Dresser, for $3 billion.
GE said in a statement that Dresser will bring almost immediate impact to the bottom line of the company, adding earnings in 2011.
Vice chairman of GE and president and chief executive of GE Energy, John Krenicki, said about the deal, “Dresser is a great fit for the GE business model. Dresser’s technology complements our existing gas engine portfolio ... Eighty-five percent of Dresser’s revenue is from energy customers, and it has developed a large installed base of equipment, which is a big reason why 40 per cent of its total revenue is derived from aftermarket service offerings, and there is a lot of room for future expansion.”
“We’re doing this deal to grow,” Krenicki added. “We know the customers. We like the technology. The businesses they have are leaders in the spaces they’re in.”
The manufacturers of oil-field equipment have drawn significant interest this year, with 43 deal being made across the globe.
For General Electric's overall strategy, they've said they should have a war chest of about $25 billion by the end of 2010 to work with concerning expanding the business.
GE also said today they attempted to acquire UK-based Wellstream Holdings Plc but had the $1.2 billion offered rejected.
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