New York, NY, United States (4E) – General Electric Co. announced on Monday that it will purchase Cameron International Corp.’s reciprocating-compression unit for $550mn as the conglomerate seeks to strengthen its downstream operations.
The transaction includes the oil-and-gas equipment maker’s higher horsepower, high-speed reciprocating compressors used for oil and gas production, processing and distribution, which have helped the boom in the North American shale oil and gas industry.
The Cameron division, which offers reciprocating-compression equipment and aftermarket parts and services, has around 900 employees and has sales of around $355mn in 2012.
GE Oil & Gas, which is among the fastest-growing units at GE, will add the Cameron business to its new downstream-technology-solutions unit.
Profits at the division have surged at an average 16 percent over the previous three years, as orders reach about $20bn, with the downstream business valued at $11bn.
GE said in a statement that the deal will bring the company in a strategic position to serve the industry globally as shale continues to grow in other parts of the world like Asia and South America.
The Houston-based Cameron said it expects to record a $100mn loss on the sale, reflecting the write-off of goodwill. The transaction will likely be completed later this year subject to approval from regulators.