GE targets UK’s Wellstream

Eyeing
fast growth in deepwater drilling and emerging markets, General Electric
unveiled a bid to acquire U.K. oil pipemaker Wellstream for $1.3 billion.The
deal, which is expected to be completed in the first quarter of 2011, would
give Wellstream shareholders 780 pence in cash and a special dividend of 6
pence in cash per share.

GE
made the move with an eye on the fast-growing deepwater industry, citing
projections for double-digit growth in the next five years in this space. The
move would also enhance the conglomerate’s oil and gas unit and give it an opportunity
to capitalize on growth in Brazil, Africa and Asia.

“Wellstream’s
flexible riser and flow line products will extend our subsea solutions
portfolio, providing customers – including those in Brazil, Africa and Asia –
with the reliable technology and services needed to tackle their toughest
deepwater challenges and to optimize the efficient production of oil and gas,”
Claudi Santiago, CEO of GE Oil & Gas, said in a statement.

GE,
which does everything from manufacturing aircraft engines to making loans, said
Wellstream will benefit from GE’s technology, global reach and supply chain.

“This
is an attractive offer which, together with the special dividend, allows
shareholders to realize their investment in cash at a price which reflects both
our progress since Wellstream’s IPO in 2007 and the potential for further
growth,” Wellstream Chairman John Kennedy said in the statement.

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