GE to Bid for Wellstream Holdings - Analyst Blog

General Electric Company (GE) is likely to launch a bid of £755 million plus ($1.2 billion+) for takeover of British oilfield services company Wellstream Holdings.

GE had announced in October 2010 that Wellstream rejected an earlier bid valuing the company at £755 million.

Wellstream manufactures flexible pipes used by oil companies in deep sea water, an area with high growth possibilities due to major finds in Brazil.

For GE, the deal will mark its second substantial acquisition in the energy sector in two months. Wellstream was owned by Dresser 15 years ago. Dresser was bought by GE in Oct 2010 for $3bn. The two companies are characterized as complementary.

Meanwhile, GE has raised its dividend for the second ime in five months, giving shareowners a 17% increase.

GE has one of the best infrastructure franchises worldwide with solid organic growth rates, exposure to favorable secular trends and a large installed base supporting a growing annuity-like service business. 

Infrastructure businesses from GE are helping build the energy, health, transportation and technology infrastructure of the new century. These businesses provide the products and services that help developing regions participate in the global economy, while also helping developed regions upgrade with cleaner, more efficient and better technologies.

Financial business at GE offers an array of products and services aimed at enabling commercial businesses, consumers and markets worldwide to build astronger and financially secure future.

GE has adopted strategic imperatives to strengthen its portfolio by building strong growth platforms and generating cash from low-return businesses.  Its focus remains on accelerating organic growth and achieving technical and service excellence, while building enduring customer relationships around the world. 

GE has products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products. Since its incorporation in 1892, the company has developed or acquired new technologies and services that have broadened considerably the scope of its activities. Philips (PHG) andSiemens AG (SI) are major competitors.

We currently have a Neutral recommendation on General Electric Company.

 
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