GE to Buy Wellstream for $1.3 Billion to Bolster Energy Unit
By - Dec 13, 2010 6:26 AM MT
Jeffrey Immelt, chairman and chief executive officer of General Electric Co. Photographer: JB Reed/Bloomberg
Dec. 13 (Bloomberg) -- Bloomberg's Erik Schatzker reports on the latest breaking news and top stories in today's Business Briefs. (Source: Bloomberg)
General Electric Co. agreed to buy Wellstream Holdings Plc, a U.K.-based oilfield-services provider focused on Brazil, for 800 million pounds ($1.3 billion) in the company’s second purchase in the industry this year.
Wellstream’s stockholders will receive 786 pence a share, including a 6 pence special cash dividend, GE said today in a statement, sweetening an offer of 755 pence that was rebuffed in October. The bid is 29 percent higher than Wellstream’s closing price on Sept. 20, the day before the British company announced it had received approaches.
The acquisition strengthens GE’s presence in Brazil, whereExxon Mobil Corp., BG Group Plc and state-controlled Petroleo Brasileiro SA may need to spend more on Wellstream’s flexible pipes and risers to ramp up energy production. The deepwater Tupi and Libra fields, discovered in the past three years, together may contain more than 20 billion barrels of oil.
“Subsea growth will come from Brazil,” Claudi Santiago, chief executive officer of GE Oil & Gas, said in a telephone interview. “Brazil is one of many reasons” buying Wellstream made sense, he said.
Wellstream shares rose as much as 5.5 percent to 788 pence in London. They traded at 786.5 pence at 1:11 p.m. local time.
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