GE Buying UK Oil Pipemaker Wellstream for $1.3 Billion

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Eyeing fast growth in deepwater drilling and emerging markets, General Electric (NYSE:GE) unveiled a bid on Monday 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.

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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 flowline 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.

Wellstream’s London-listed stock jumped 5.35% to 474 pence on Monday. GE’s stock also rose on the news, climbing 0.73% to $17.85 ahead of Monday’s U.S. open.

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