In a bid to capitalise on the booming U.S shale gas industry, German engineering company Siemens has agreed to buy U.S. oil-equipment maker Dresser-Rand Group Inc. for $7.6 billion. By completing this deal Siemens joined other German firms including chemicals groups BASF SE and Wacker Chemie AG, in shifting its operations to the U.S. – a move caused in part by Germany’s cautious approach to shale exploration.
Siemens, which already makes gas turbines and equipment to distribute power, has recently purchased Rolls-Royce Holdings Plc’s gas turbine and compressor business for 1.3 billion dollars in an attempt to strengthen their foothold in North America. The purchase of Dresser-Rand which produces compressors, turbines and other rotating equipment, will strengthen Siemens’ position in the American market and allow the company to profit more directly from shale-gas extraction activities.
Switzerland-based Sulzer AG was reported to also have been interested in purchasing Dresser-Rand but was beaten to it by Siemens which had offered $83 per share in the U.S. oil equipment producer. In effect, Nasdaq reported that Dresser-Rand shares on Friday had shot up 9.4% to close at $79.91. General Electric had also been in talks with Dresser-Rand for a possible offer, the Financial Times reported on 19 September
“This is a transaction that should create value for clients, as well as for both sets of shareholders, that would not have been achieved had Dresser-Rand not become part of the Siemens group,” Vincent Volpe Jr., Dresser-Rand’s CEO, said in a joint statement.
As a part of an overhaul of its business, and to generate money for the Dresser-Rand takeover, Siemens agreed to to sell its stake in household appliances joint venture BSH to partner Robert Bosch, bringing in 3 billion euros ($3.9 billion).
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