National Oilwell Varco Inc., the largest U.S. oilfield equipment maker, said it will acquire fiberglass pipe provider Ameron International for about $772 million to expand into seawater handling business as global demand for oil grows.
Shares of Ameron climbed 27 percent to $84.41 in early New York Stock Exchange trading Tuesday, while shares of National Oilwell rose 1.6 percent.
Ameron shareholders will receive $85 per share in cash, a premium of 28 percent to the stock's Friday close of $66.27.
The deal, expected to close in the fourth quarter, should add to National Oilwell's 2012 earnings per share.
Ameron makes fiberglass-composite pipe for transporting oil, chemicals and corrosive fluids. The company, which operates in North America, South America, Europe and Asia, provides water transmission lines and fabricated steel products, such as wind towers.
"Ameron's marine and offshore products will expand National Oilwell's offering into seawater handling systems in new oil and gas drilling and (floating production, storage and offloading) FPSO vessels," National Oilwell Chief Executive Officer Pete Miller said in a statement.
The combined company's composite pipe operations will also benefit from efficiencies and scale, Miller said.
Ameron's financial adviser on the deal is Bank of America Merrill Lynch and its lead legal adviser is Gibson Dunn and Crutcher.
Shares of Ameron climbed $18.18 to $84.45, while shares of National Oilwell rose $1.30 to $79.61.
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