General Electric (NYSE:GE) unveiled a $2.8 billion deal over the weekend to scoop up the well support division from U.K. energy services company John Wood Group.
GE said it made the move with the aim of enhancing its oil and gas business by adding electrical submersible pumps to its growing portfolio.
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The business acquired by GE has about 3,800 employees and more than 20 manufacturing and multiple service centers around the world. With 2010 revenue of nearly $1 billion, the well support division has three business platforms: electric submersible pumps, pressure control and logging services.
“With world-class products and people, Wood Group’s Well Support division is an excellent strategic fit with our business model of high technology engineering, manufacturing and services,” Claudi Santiago, CEO of GE Oil & Gas, said in a statement.
The deal, which is still subject to shareholder and regulatory approval, is expected to close later in 2011.
“GE represents an excellent new home for the Well Support division; the combination is complementary in capabilities and technologies and will benefit employees, customers and shareholders alike,” said Allister Langlands, the CEO of John Wood Group.
GE and John Wood Group said they have agreed to talk over the next 90 days about a possible commercial arrangement on turbo machinery servicing activities.
GE shareholders had a muted response to the deal, bidding the company’s stock up 0.61% to $21.46.