Automation junkies were speculating about a GE acquisition in the automation market–speculating on such companies as Rockwell. Well, the acquisition blockbuster was announced today, and it was not an automation company. It was Dresser Inc. for $3 billion. In our business, Dresser is perhaps best known through its Masoneilan valves division.
Dresser will be folded into the GE Energy business. GE Intelligent Platforms, the automation business, resides in the Enterprise Solutions business. I’m waiting on a comment from GEIP and will update if they have anything to say.
GE notes in its release, “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. The deal is subject to customary closing conditions and is expected to close promptly after receiving regulatory approval.”
“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 $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 installed base of equipment, which is a big reason why 40 percent of its total revenue is derived from aftermarket service offerings, and there is a lot of room for future expansion.”
The release continues, “Dresser also will 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 expertise, which will create opportunities to bring additional technology and applications to Dresser’s offerings. GE plans to build out solutions it offers to help customers effectively manage the pressure and relief flows in pipelines, processing plants and power generation facilities. Dresser’s capabilities combined with GE’s existing solutions will help to increase customer productivity and reduce operational costs.”
The deal announcement continues a series of actions in GE’s energy business over the last 10 days. On September 27, GE announced a joint venture in China to grow in the world’s largest wind market. On October 1, the company announced the close of the purchase of assets of Calnetix Power Solutions, which expands GE’s capabilities to recover waste heat from industrial processes for electricity generation and will also complement GE’s gas engine business. On October 4, GE signed a $700 million contract with Saudi Electricity Company for a new, high-efficiency power plant in Riyadh, Saudi Arabia.