General Electric (GE) purchases British oilfield services firm Wellstream Holdings

GE today announced its intention to make an offer for 100% of Wellstream Holdings PLC, a leading engineer and manufacturer of high-quality flexible pipeline products for oil and gas transportation in the subsea production industry. The terms of the transaction, which value Wellstream’s share capital at £0.8 billion ($1.3 billion), offer Wellstream shareholders 780 pence in cash per Wellstream share and a special dividend of 6 pence in cash per Wellstream share.

The transaction, which the board of Wellstream intends to unanimously recommend to Wellstream’s shareholders, is expected to complete in the first quarter of 2011, subject to acceptance by shareholders and customary closing conditions.

With double-digit growth expected in deepwater spending annually for the next five years, the addition of Wellstream will broaden GE Oil & Gas’ extensive subsea production systems equipment and service capabilities. It also will enhance GE’s ability to capitalize on growth in Brazil, Africa and Asia.

The proposed acquisition is part of GE's growth strategy to invest in its high-technology industrial businesses, enhance product competitiveness and expand its presence in fast-growing emerging markets. It also aligns with GE’s plans to capitalize on complementary and financially attractive acquisitions and partnership opportunities.

By acquiring Wellstream, a high-tech player in the flexible pipeline segment within the subsea industry, GE will further extend its reach into the important floating production, storage and offloading offshore segment. Wellstream will benefit from access to GE subsea systems, material science, sensing and inspection, and remote monitoring and diagnostics technology, as well as an extended global reach and supply-chain.

Claudi Santiago, President and CEO, GE Oil & Gas noted that Wellstream is an excellent strategic fit with GE’s Oil & Gas business and represents an important win for customers, GE, and for Wellstream’s shareholders and employees.

Wellstream’s flexible riser and flowline products will extend the firm’s subsea solutions portfolio, providing customers – including those in Brazil, Africa and Asia – with the reliable technology and services needed to tackle their toughest deepwater challenges and to optimize the efficient production of oil and gas, he said.

Wellstream has a strong research and development focus and worldwide track-record of successful completion of complex flexible pipe projects. Key products include dynamic flexible risers, static flowlines, jumpers and fluid transfer lines for deep and ultra-deepwater dynamic environments.

Wellstream operates two manufacturing facilities in Newcastle, UK, and Niterói, Brazil, employing approximately 850 qualified engineers and staff.

13 Dec 2010.