HOUSTON--(BUSINESS WIRE)--GE Oil & Gas (NYSE:GE) and Cameron (NYSE:CAM), a Houston-based provider of flow equipment, systems and services, today announced that GE has agreed to acquire Cameron’s Reciprocating Compression division for $550 million.
The division provides reciprocating compression equipment and aftermarket parts and services for oil and gas production, gas processing, gas distribution and independent power industries. Cameron’s Reciprocating Compression division, which generated sales of approximately $355 million in 2012, has approximately 900 employees and operates from 20 global locations. The acquisition is expected to close later this year subject to regulatory approval.
High-speed reciprocating compressors are used in several applications from gas gathering, gas lift and injection, as well as transmission and storage. The development of shale oil and gas fields, particularly in North America, has increased demand for high-speed reciprocating compressors. As shale continues to develop in other regions of the world, such as Asia and South America, the acquisition will position GE to serve the industry globally.
"This acquisition will benefit our employees, customers and GE shareholders alike,” said Lorenzo Simonelli, president and CEO of GE Oil & Gas. “Our increased strategic focus, the buoyant oil and gas sector and our track record in providing high-quality support to customers combined with Cameron’s Reciprocating Compression division will position us for accelerated growth.”
Oil & Gas is one of GE’s fastest-growing businesses, with orders rising from less than $1 billion per year in 1994 to nearly $20 billion today and profits growing at an average 16 percent over the past three years.
After closing, Cameron’s Reciprocating Compression division will become part of GE’s Oil & Gas recently formed Downstream Technology Solutions business in order to better serve the $11 billion downstream and distributed gas segments. The new business is designed to deliver products, services and packaged solutions for both the traditional downstream and the evolving unconventional oil and gas space.
Hasan Dandashly, vice president of Downstream Technology Solutions, said, "Cameron’s Reciprocating Compression division will become an important part of our downstream offering to customers. Its services and geographic presence will expand our distributed gas portfolio and enhance our shale capability and services expertise for our customers.”
The acquisition complements GE’s Oil & Gas’ existing High-Speed Reciprocating (HSR) business, which focuses in low horsepower units that are used predominately in gas lift applications. Cameron’s Reciprocating Compression division portfolio complements GE’s business by adding higher horsepower models used in gas gathering, processing and transmission.
Richard Stegall, president of Cameron’s Reciprocating Compression division, said, “We are very excited at the prospect of joining GE Oil & Gas and the Downstream Technology Solutions business. Given our collective breadth of service offerings, the combination will greatly benefit both companies’ customers and employees. We have achieved good growth over recent years, and we anticipate that this trajectory will continue with the support of GE Oil & Gas."
The Downstream Technology Solutions business provides products, packaged solutions and services for refining, petrochemical, industrial and natural gas customers. Our products include compression, industrial power generation, pumps and valves. Our packaged solutions include smaller-scale CNG and modular LNG plants.
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