Dresser-Rand Group Inc. (NYSE: DRC) has entered into a definitive merger agreement with Siemens under which Siemens will acquire all of the outstanding shares of Dresser-Rand common stock for $83 per share in cash. The transaction is valued at approximately $7.6 billion, including the assumption of debt.
The price represents a premium of 37.4% over Dresser-Rand's closing share price of $60.42 on July 16, the day before speculation in the press appeared regarding interest in Dresser-Rand. Additional per share cash consideration of $0.55 shall be applied on the first day of each month starting March 1, 2015, until the closing occurs.
Siemens intends to operate Dresser-Rand as the company's oil and gas business retaining the Dresser-Rand brand name and its executive leadership team. In addition, Siemens intends to maintain a significant presence in Houston, which will be the headquarters location of Siemens' oil and gas business.
The transaction is expected to close in the summer of 2015 and is subject to Dresser-Rand shareholder approval; regulatory approval in the US, Europe, and certain other jurisdictions; and other customary closing conditions. Under the terms of the merger agreement, Siemens has committed to take all necessary steps from a regulatory perspective to ensure that the transaction will be completed.
Morgan Stanley & Co. LLC and Zaoui & Co. acted as financial advisors to Dresser-Rand. Wachtell, Lipton, Rosen & Katz, and Gibson, Dunn & Crutcher LLP, served as legal counsel to Dresser-Rand.