Monday, April 8, 2013

GE to Buy Oil & Gas Giant Lufkin for $3.38 Billion

General Electric agreed to buy oilfield services provider Lufkin Industries to expand its profitable oil and gas business.

GE, the world's biggest maker of jet engines and electric turbines, has expanded in the energy industry with a series of acquisitions of companies that make equipment used in oil and gas production, while divesting assets in finance and media industries.

The company has spent about $11 billion in acquisitions since 2007 to boost its presence in the oil and gas business, which is the conglomerate's fastest-growing and which contributes about 10 percent of its total revenue.

GE's offer values Lufkin at $88.50 per share, a premium of 38 percent to the stock's Friday close. Shares of Lufkin surged in pre-market trading, while shares of GE also traded higher.

The acquisition, valued at about $3.3 billion including debt, is expected to close in the second half of 2013.

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