Siemens To Acquire Dresser-Rand for $7.6 Billion; To Battle with GE and Sulzer

Siemens AG, the famous electronics conglomerate announced Sunday that it had bid for all outstanding commons shares of Dresser-Rand Group Inc, the equipment solutions firm, for a deal worth $7.6 billion.

Two other companies - General Electric and Sulzer - are also considering an offer for the firm. Siemens will have to battle it out with the othe  two international giants for the Texas-based company.

Until now, Siemens is the only company that has made a full public and official offer for Dresser-Rand. The company has offered $83 per common share in cash and also asserted that Dresser-Rand's board has unanimously approved the "friendly takeover."

Dresser-Rand's board has apparently recommended the offer to the shareholders and if approved, Siemens will go forwards with the deal. It plans on closing transaction by 2015. The deal is subject to regulatory approvals.

"As the premium brand in the global energy infrastructure markets, Dresser-Rand is a perfect fit for the Siemens portfolio. The combined activities will create a world-class provider for the growing oil & gas markets. With this, Dresser-Rand will become 'The oil and gas' company within Siemens and fit right into our Siemens Vision 2020," Joe Kaeser, President and CEO of Siemens AG said in an official statement.

Further explaining the Dresser-Rand acquisition, Lisa Davis, member of the Managing Board of Siemens AG said:

"Dresser-Rand has strong presence in oil and gas, a reputation for technology leadership and innovation, and a talented and experienced leadership team. Our intention is to leverage these strengths by maintaining the existing company and brand name and selectively moving complementary products and services from the existing Siemens portfolio into Dresser-Rand enabling us to offer a much broader range of products, services and solutions to meet our customers' needs."

Market analysts also believe that this is a strategic deal for both the companies and will also benefit the consumers and the industry as well.

"The valuation is a stretch but strategically it makes sense. With the deal, the energy business will be strengthened, especially in the U.S. where Siemens hasn't been as strong," Volker Stoll, a Stuttgart-based analyst at Landesbank Baden-Wuerttemberg told Bloomberg.

News of Dresser-Rand offering itself for acquisition came in July after it hired Morgan Stanley for advice on a takeover bid, Bidnessetc.com reported.

Reports have it that General Electric is contemplating an offer for Dresser-Rand. Zurich-based Sulzer also said earlier that it was in "non-exclusive" talks with the company of a "potential transaction."