GE to Buy Oil Pump Makers Lufkin for $2.98 Billion

General Electric (NYSE: GE) has announced that it will buy the oilfield pump maker Lufkin Industries for $2.98 billion, as part of its strategy to increase its presence in the growing shale sector.

The deal, which is expected to be completed by June this year, will nearly double the revenues of GE’s Oil & Gas unit; last year GE earned $1.92 billion from its oil and gas assets, and Lufkin made $1.3 billion. The Oil & Gas unit has been growing at a rapid rate, increasing revenues by 16% from 2011 to 2012, and will now become GE’s third largest manufacturing unit.

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Last year Keff Immelt, the CEO of GE, spoke openly about his company’s plans to focus on developing a larger market presence in the shale fields of North Dakota, Texas, and elsewhere in the US. He revealed that GE would look for acquisitions and investments in the range of $1 billion to $3 billion. He always admitted that the natural gas sector, especially shale gas is “the place to play both in terms of the U.S. and the rest of the world.”

In order to try and grow its share in the US shale market, GE has spent around $11 billion since 2007, acquiring various assets within the oil and gas sector.

By. Joao Peixe of Oilprice.com