Dow component General Electric will pay $2.8 billion to acquire the well-support business of Scotland-based John Wood Group Plc in the latest move by the industrial conglomerate to boost its offering of oil services at a time when crude prices are expected to rise to $100.
General Electric reportedly beat out Texas-based Halliburton (HAL), the world's second-largest provider of oilfield services, for the John Wood business, which helps pump oil from mature fields. The business, which also helps extract gas from shale, had sales of $947 million and EBITDA of $166 million in 2010, according to Bloomberg News.
While some analysts said GE (GE) is paying top dollar for the John Wood business, the deal is being financed entirely in cash. GE expects the transaction to close later this year. GE Oil & Gas more than doubled revenue in five years to $7.6 billion last year, Bloomberg reported.
In December, GE announced it would acquire U.K.-based oil services firm Wellstream. GE said it will continue to look at acquisitions in the $1 billion to $3 billion range in an effort to bolster its oil services business.