Siemens buys out Dresser-Rand for $7.8bn
US oilfield firm had a $1.2bn debt
Siemens acquired US oilfield firm Dresser-Rand for $7.8bn on Tuesday after the EU Commision approved the bid placed in 2014.
The German conglomerate will pay all shareholders $83 per share and cover a time-dependent ticking fee totaling $2.20 per share for the months of March to and including June 2015. The transaction also includes Dresser-Rand's $1.2bn debt.
Siemens is financing the purchase price from operating and investing cash flows and with newly issued USD bonds. The shares of Dresser-Rand Group Inc., which is headquartered in Houston, Texas and Paris, are currently listed on the New York Stock Exchange.As of July 2015, its shares will no longer be listed on the exchange.
Dresser-Rand's business – together with Siemens' compressor unit and the related service business – will form a new Dresser-Rand unit within Siemens Power and Gas Division with a primary focus on the oil and gas industry.
Dresser-Rand's current CEO, Vincent Volpe will lead the business through the initial integration phase. In Spetember Christopher Rossi, 28-year veteran of Dresser-Rand, will take over as CEO at the newly formed business.
Siemens manager Heribert Stumpf will serve as the unit's CFO. Siemens is anticipating annual synergies of about $221mn from the integration of Dresser-Rand by 2019.
Dresser-Rand had revenue of around $2.8bn in fiscal 2014 and employed about 7,900 people.
"With Dresser-Rand on board, we now have a comprehensive portfolio of equipment and capability for the oil and gas industry and a much expanded installed base, allowing us to address the needs of the market with world-class products, solutions and services," said Lisa Davis, member of the board of Siemens.
"The current level of oil prices increases the focus of our customers for ways to reduce costs. So despite the challenges of a low oil price, this also brings opportunities as we focus our efforts on offers that reduce costs and increase efficiency. The long-term growth trajectory for oil and gas remains intact," she added.