General Electric to acquire Vetco Gray for $1.9 billion

General Electric on January 8 announced a major expansion of its presence in the global oil and gas industry, entering into an agreement to acquire Vetco Gray for $1.9 billion from Candover, 3i and JP Morgan Partners.

The move further strengthens GE’s Infrastructure portfolio and its ability to meet customers’ needs around the globe. The closing of the transaction, which is subject to conditions including the receipt of governmental, regulatory and other approvals, is expected in early 2007.

Vetco Gray is one of the world’s leading suppliers of drilling, completion and production equipment for on- and offshore oil and gas fields, including subsea applications. The business, which is expected to generate over $1.6 billion of sales in 2006, employs 5,000 people in more than 30 countries, with key centers in Houston (USA), Aberdeen (United Kingdom), Stavanger (Norway), Oslo (Norway) and Singapore. Major products include flow control valves (known as “Christmas trees”), control systems, wellheads, manifolds, risers and associated after-market services.

“This acquisition enables GE to seize faster growth in a rapidly expanding global business,” said Claudi Santiago, CEO of GE Oil & Gas. “Vetco Gray expands the portfolio of products, services and solutions available to one of the world’s most dynamic industries.”

“We believe this agreement will be great news for our employees and customers,” said Peter Goode, CEO of Vetco International. “The combination of GE’s recognized technical expertise and financial resources and Vetco Gray’s industry know-how and domain knowledge will allow the business and its employees to continue to prosper as it meets our customers’ most difficult challenges.”

“We are tremendously excited about this transaction and look forward to welcoming the Vetco Gray team into our business,” added Santiago. “Their technology track record, depth and breadth of talent are well known and are strong differentiators in this industry. We are extremely confident about the prospects of growth accorded by the combination of our two businesses."

Upon completion of the transaction, Candover, 3i and JP Morgan Partners will continue to own Vetco Aibel, which is engaged in the business of design, engineering, construction and maintenance of oil and natural gas production facilities, process systems and related products.