GE is living up to the pledge it made shareholders in its 2009 annual report when it vowed that “GE must be an industrial company first.” In October, the company announced plans to acquire Dresser Inc. for US$3 billion in its latest move to grow its energy business.
The addition of Dresser’s portfolio which includes technologies for gas engines, control and relief valves, measurement, regulation and control solutions for gas and fuel distribution will expand GE’s core energy offerings and extend its reach into adjacent offerings for its energy and industrial customers around the world.
“Dresser is a great fit for the GE business model,” said John Krenicki, vice chairman of GE and president and CEO of GE Energy. “Dresser’s technology complements our existing gas engine portfolio and adds offerings complementary to those of GE in the US$45 billion flow technology industry, including product offerings in the highly engineered valve segment. Eighty-five percent of Dresser’s revenue is from energy customers, and it has developed a large installedbase of equipment, which is a big reason why 40% of its total revenue is erived from aftermarket service offerings, and there is a lot of room for future expansion.” Krenicki added, “Dresser has a global franchise and brand with 60% of revenues outside of North America, which will be accelerated by GE’s global footprint. Through the acquisition, we will bring to bear our focus on research and development to Dresser’s highly engineered custom solutions and create an opportunity for Dresser’s 6300 talented employees to dramatically expand their businesses.”
Headquartered in Addison, Texas, U.S.A., Dresser operates in more than 100 countries, delivering compression, flow technology, measurement and distribution infrastructure and services to customers in more than 150 countries. The deal includes Dresser’s Waukesha engine brand. Waukesha will join with GE’s Jenbacher line in a now expanded portfolio of oilfield gas engines.
Dresser’s gas engines will give GE low-emissions, fuel-flexible mechanicaldrive technology that can be applied to the small-scale compression segment of the oil and gas industry. GE Jenbacher’s experience in fuel-flexible, high-efficiency, power generation engines, combined with Dresser’s experience in low-emissions, fuel-flexible rich-burn mechanical drive engines, should deliver benefits to both engine lines.
Dresser will also further the development of GE Energy’s monitoring, diagnostics and performance optimization offerings. Dresser’s pressure relief and control valve technologies will be complemented by GE’s domain experience, which should create opportunities to bring additional technology and applications to Dresser’s offerings. GE plans to build out solutions it offers to help customers manage the pressure and relief flows in pipelines, processing plants and power generation facilities.
“Our track record integrating previous acquisitions such as Nuovo Pignone (Oil & Gas), Jenbacher (gas engines), Bently Nevada (conditioning and monitoring) and Enron Wind (renewable energy), gives us great confidence to build upon as we move forward with Dresser,” said Krenicki. “Our team is committed to technology leadership, globalization and operating discipline.” The deal is subject to customary closing conditions and is expected to close quickly following regulatory approval.