General Electric Co. (GE) will buy Wellstream Holdings Plc (WSM), a British oilfield-services provider focused on the Brazilian market, for 800 million pounds ($1.3 billion).

The deal is worth 786 pence per share of Wellstream, including a 6 pence special cash dividend, Bloomberg News reported. That's 29% higher than the stock's closing price on Sept. 20, the day before Wellstream said it had received approaches.

Wellstream rejected an offer of 755 pence a share from GE in October.

The deal will boost GE's presence in Brazil, where oil companies such as Exxon Mobil (XOM) and state-controlled oil company Petroleo Brasileiro (PBR) are working to develop the deepwater Tupi and Libra fields. The two fields together may hold more than 20 billion barrels of oil.

"Subsea growth will come from Brazil," Claudi Santiago, CEO of GE Oil & Gas, told Bloomberg News. "Brazil is one of many reasons" buying Wellstream made sense, he said.

GE CEO Jeffrey Immelt has been working to strengthen GE's industrial operations and shrink the finance unit as a source of sales and profit. In October, Immelt said that GE had $20 billion in discretionary cash to spend.

The Wellstream deal will be GE's second acquisition in the oil sector this year. In October, GE agreed to buy oil-field equipment maker Dresser Inc. for about $3 billion.

Wellstream is based in Newcastle-Upon-Tyne, England. In 2009, it had sales of 386.1 million pounds, with more than half that revenue coming from Brazil.

The company makes equipment including pipelines and risers used in underwater oil-field operations.




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