Tags: Siemens | Deal | Dresser-Rand

Siemens Near Deal to Buy Dresser-Rand - Sources

Sunday, 21 Sep 2014 04:05 PM

The German industrial conglomerate Siemens AG is near an agreement to acquire U.S. oilfield equipment maker Dresser-Rand Group Inc. for all cash, people familiar with the matter said on Sunday.

A deal for Dresser-Rand, which has a market capitalization of more than $6 billion, could come as soon as Monday, some of them said.

Siemens is expected to pay low- to mid-$80s per share, the sources said, compared with Dresser-Rand's Friday closing price of $79.91, which already had been boosted by takeover speculation in the past several days.

Discussions between the two companies are continuing and could still fall apart, the sources cautioned, asking not to be named because the matter is not public. A representative for Siemens declined to comment and a representative for Dresser-Rand could not immediately be reached.

Siemens, with its cash takeover bid, has trumped a competing offer from Swiss pump maker Sulzer AG, which proposed merging with Dresser-Rand in an all-stock deal, the sources said.

By acquiring Dresser-Rand, Siemens would get the company's compressors and turbines serving the oil and gas industry at a time when a North American drilling boom boosts demand for energy services and equipment.

Siemens has long coveted Dresser-Rand, which would help it grow its oil and gas business as a boom in fracking, the extraction of natural gas from deep layers of rock using high-pressure fluid injections, is boosting demand for energy services and equipment.

But it shrank in the past from making a formal bid, balking at its high valuation. Dresser-Rand trades at 24.6 times 12- month forward earnings, a 60 percent premium to its peers in oil and gas equipment and services, according to Reuters data.

Siemens Chief Executive Officer Joe Kaeser said at the end of July the company planned to focus on restructuring rather than acquisitions for the moment, but would have the financial firepower for the right acquisition target.

Siemens had cash and cash equivalents of 8.21 billion euros ($10.53 billion) at the end of June.

The German group lost out in a bidding war with General Electric Co for Alstom SA's energy assets in June.

Siemens agreed in May to buy the energy gas turbine and compressor business of Britain's Rolls-Royce Holdings PLC for 785 million pounds ($1.28 billion).

The deal was announced along with a long-awaited restructuring by Kaeser, who took power in summer 2013 after a boardroom coup.

The restructuring is aimed at strengthening Siemens' focus on processes to help industrial companies produce more efficiently.

© 2017 Thomson/Reuters. All rights reserved.

 
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The German industrial conglomerate Siemens AG is near an agreement to acquire U.S. oilfield equipment maker Dresser-Rand Group Inc.for all cash, people familiar with the matter said on Sunday.
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2014-05-21
Sunday, 21 Sep 2014 04:05 PM
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