GE (NYSE:GE) completed the strategic acquisition of John Wood Group PLC’s Well Support Division for $2.8 billion, expanding GE Oil & Gas’ extensive drilling and surface manufacturing and services portfolio.
The John Wood Group PLC Well Support division, which has over 3,800 employees globally and operates approximately 20 manufacturing and multiple sales and service centers worldwide, is comprised of three business platforms – ESP (electric submersible pumps), Pressure Control (surface wellheads and trees) and Logging Services - which, combined, recorded 2010 revenues of $947 million.
The $2.8 billion transaction enables GE to capitalize on the fast-growing demand for enhanced oil recovery from mature oil fields using downhole pump ‘artificial lift’ in brownfield developments; as well as, expanding GE's high-technology product and service offering in unconventional oil and gas production, with significant applications for shale gas production.
Claudi Santiago, President and CEO, GE Oil & Gas said: “Given the reliability and quality of its technology and the expertise of its employees, the Well Support division is an excellent addition to GE Oil & Gas, strengthening our engineering capabilities and our extensive suite of advanced capital drilling and production solutions. Combined with our integrated portfolio, global supply-chain and footprint, the Well Support division adds further value for our customers and enhances GE’s position in rapid growth oil and gas industry segments and regions.”
Jim Renfroe, the CEO of Wood Group PLC’s Well Support Division, said: “We are delighted to become part of the GE Oil & Gas family. The transaction positions GE Oil & Gas firmly to lead a new chapter in oil and gas unconventional production, expanding our combined customer base and providing significant new channels for advanced high-tech equipment and services around the world.”
GE Energy has a proven record of acquiring, integrating, and growing companies, as demonstrated by the acquisitions of Nuovo Pignone (Oil & Gas), Jenbacher (Gas Engines), VetcoGray, and Hydril Pressure Controls (Oil & Gas). In the last six months GE Energy has announced approximately $11 billion of acquisitions, including Converteam, Dresser, Inc. and Lineage Power Holdings - all high-tech companies complementing GE Energy’s core technologies and enabling the business to broaden its offerings for critical industries.