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GE to buy Cameron's reciprocating compression division for $550M

  • GE earlier today said it agreed to acquire Cameron International's (CAM) reciprocating compression unit for $550M, in a deal GE sees as strengthening its recently formed downstream technology solutions unit.
  • The development of shale fields, especially in North America, has increased demand for high-speed reciprocating compressors used in gas gathering, gas lift and injection, transmission and storage; CAM's unit had sales of ~$355M in 2012.
  • CAM says it expects to post a loss of ~$100M on the sale, reflecting the write-off of goodwill.
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Comments (3)
  • bernie 1
    , contributor
    Comments (551) | Send Message
     
    As a shareholder for many years of GE, I wonder if we are getting into the development of the shale fields after all the players are already doing there thing.
    21 Jan 2014, 05:26 AM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9438) | Send Message
     
    hi bernie 1: these reciprocating compressors are used for gas gathering, gas lift and injection, as well as transmission and storage. It would appear the move is more of a mid-stream play to take advantage of increased domestic shale production. Seems smart to me. I haven't checked the latest quarterly results, but for the last few quarters, oil & gas has been one of the fastest if not the fastest growing segment of the company. Sure is nice to see GE moving back to its industrial roots and away from the financial hanky-panky Jack Welch got them into.
    21 Jan 2014, 12:35 PM Reply Like
  • UmairoSuave
    , contributor
    Comment (1) | Send Message
     
    An overall good move by GE to bolster their CapEx portfolio for oil and gas. This extends beyond shale to all unconventionals, both liquid plays and dry. Add a robust service offering and strategic proximity to top customers, independents and majors, and you have a long-term annuity stream from aftermarket offerings that span far beyond compression applications - this includes pumps, engines, other turbo machinery assets, and related field services. Given the abrasive nature of the applications and associated turnover / replacement of oilfield assets, GE will see real benefit.
    21 Jan 2014, 02:30 PM Reply Like
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