The U.S. conglomerate General Electric (GE, Financial) has pledged that it will leave no stone unturned to see to that its industry segment contributes to its revenue to the maximum extent possible. GE has been a leader in its acquisition history and has always acquired top leading companies to create a difference in the sector it wants to target in the long run. It seems that based on the same acquisition spree, GE has recently released an update with respect to its oil and gas sector – it is acquiring Oceaneering International (OII, Financial) that is a global provider of engineered services and products, primarily to the offshore oil and gas industry. Let’s have a glance at what has been shared by the company management with regard to this recent acquisition.
The announcement creates a subtle difference
GE formally announced on December 16 that it has signed an agreement to acquire the Subsea Electric Actuator product line of Oceaneering and the product line would go to the market under the Oceaneering Subsea All Electric and Ifokus brand, which specializes in the design and manufacturing of specialty subsea products, with a focus on electric valve actuators. This acquisition is presently subject to regulatory approvals and is expected to be completed by the first quarter of 2015.
Oceaneering’s vice president of corporate development , Mark Peterson, stated – “We are extremely pleased to sign our agreement with GE, which has the global resources, subsea controls technology and systems integration expertise required to bring Ifokus technology to full-scale commercial production to meet the growing demands for subsea electrification…”
Electric actuators are fitted to the subsea systems that control the flow, usually oil and gas, out of the well or the injection of fluids into the well to enhance recovery. This technology is best suited for complex subsea processing applications and more difficult extraction environments such as deepwater fields, or fields with longer offsets from the shoreline.
On this acquisition which is yet to take complete shape, GE’s Oil and Gas subsea system business CEO Rod Christie stated, “With Ifokus as part of our solutions portfolio, GE has the opportunity to pave the way for electrification in the oil and gas subsea space, giving us a new technology that is faster to operate for processing applications; has excellent enhanced diagnostic capabilities; and can be seamlessly integrated into a customer’s existing controls, communications, and power network…”
Acquisition news boosts the stock
With the news out on the acquisition the stock has taken an upward trajectory and many have shown interest in buying the stock after the dividend increase declared recently by GE which has gained momentum with this piece of information added from the company desk. In fact, the stock has shown decline of nearly 5% in the past three months, and after this news release regained lost vigour and climbed 0.53% on the same day of trading.
Last word
As GE shows innate interest in enhancing its remote sub-sea production and processing capabilities it has planned to acquire Oceaneering to make better profits in the long term. Let’s stay tuned for the acquisition to get completed after which GE’s plan of action would get better clarity.
