Siemens to buy Dresser-Rand to capitalise on U.S. shale boom

Siemens
Source: Siemens Press Photos

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).

Article continues below this message

Have your opinion heard with Shale Gas International

We accept interesting, well-written opinion and analysis articles of up to 1,500 words, that offer unique insights into the shale industry. The articles cannot be overtly promotional in nature and need to fit into at least one of our content categories.

If accepted, the article must be exclusive to Shale Gas International website and cannot appear on any other websites, publications, etc. Each article may contain up to three links to external websites relevant to the content discussed in the piece.

If you would like to contribute to Shale Gas International website, please contact us at: editor[at]mw-ep.com