GE may bid for Dresser-Rand, Dril-Quip - analysts

By Rizza Sta. Ana

Sep 06, 2013 11:51 AM EDT

General Electric Co would be eyeing Dresser-rand Group Inc. and Dril-Equip Inc as its next potential buyouts. According to analysts, GE's recent interested in oil and gas assets plus a cash surplus has the company banking on a drilling boom in the United States.

GE Chief Executive Jeffrey Immelt has been building its oil and gas unit through buyouts. It had purchased Lufkin Industries Inc for over USD3 billion. GE currently has USD19.3 billion in capital waiting to be used for takeovers.

According to Global Financial Private Capital LLC, Dril-Quip has a project sales growth of 63% in the next three years. The impressive sales figure is faster than all except two companies who have the same company size as Dril-Quip. Data compiled by Bloomberg indicated that Dresser-Rand would be expanding at 51%. Sanford C. Bernstein & Co. analyst Steven Winoker said, "They want to continue to be bigger here (oil and gas market) and make it a bigger part of the company."

However, one analyst said that should the bids for Dresser-Rand and Dril-Quip were true, it could raise concerns in antitrust.

When Bloomberg reached GE spokesman Seth Martin for comment, he said that the company does not comment on rumors. 

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