GE to acquire Lufkin Industries
GE and Lufkin Industries Inc. announced a joint agreement whereby GE will acquire Lufkin Industries Inc. for approximately $3.3 billion.
Lufkins is a provider of artificial lift technologies for the oil and gas industry and a manufacturer of industrial gears.
Lufkin shareholders will receive $88.50 per share in cash for each of their Lufkin shares.
Artificial lift, used in 94 percent of the roughly 1 million oil-producing wells around the world, helps lift hydrocarbons to the surface in reservoirs with low pressure and improves the efficiency of naturally flowing wells. Upon close, Lufkin will broaden GE Oil & Gas' artificial lift capabilities beyond electric submersible pumps (ESPs) to include rod lift, gas lift, plunger lift, hydraulic lift, progressive cavity pumps and a sophisticated array of well automation and production optimization controls and software. The ESP category of artificial lift is the only lift segment in which Lufkin does not currently compete.
"Advanced technologies, combined with new drilling practices, are revolutionizing the oil and gas industry," said Daniel C. Heintzelman, president and CEO, GE Oil & Gas. "The artificial lift segment is at the heart of critical changes that are helping producers maximize well potential-which translates into increased output at lower operational cost. Lufkin's world-class people, equipment and services fit perfectly in our portfolio and will enable us to offer a wide range of artificial lift solutions to our customers in this fast-growing artificial lift sector. In turbomachinery, Lufkin is already one of our suppliers for turbo gearing and specialty bearings products, and this acquisition allows us to further utilize their technologies and expertise for our customers."
Headquartered in Lufkin, Texas, with approximately 4,500 employees in more than 40 countries, Lufkin manufactures and services a broad portfolio of artificial lift equipment through a global network of more than 110 service centers and nine manufacturing facilities. In addition, Lufkin's three turbomachinery production facilities and seven service centers manufacture industrial gears and engineered bearings that are designed to produce higher power levels and speeds and better efficiencies in turbine applications, predominately for energy-related industrial applications.
The transaction, which is unanimously recommended by Lufkin's board of directors, is expected to close in the second half of 2013 subject to Lufkin shareholders' approval, regulatory approvals and customary closing conditions.
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