General Electric to acquire Dresser for $3 billion, part of plan to expand energy offerings

General Electric to acquire Dresser for $3 billion

NEW YORK — General Electric Co. will buy energy equipment maker Dresser Inc. for about $3 billion to capitalize on the boom in natural gas in the U.S. and abroad.

GE builds natural gas-fired turbines for power generation and provides services like water treatment and recycling for oil and gas drilling operations. Last week the company announced a mobile version of its water treatment technology designed to reach remote gas drilling locations.

Privately held Dresser’s products include small gas engines, control and relief valves, measurement, regulation and control systems used in gas pipelines, liquid natural gas facilities and power plants.

Recent discoveries of huge, cheaply accessible reservoirs of natural gas found deep underground in shale formations in the U.S. and abroad are leading analysts to predict relatively low and stable natural gas prices for years to come. As a result utilities, chemicals producers and other industrial companies are using more gas.

“One thing that happens with low natural gas prices is that people will use more,” said John Krenicki, vice chairman of GE and chief executive of GE’s energy unit. “And that’s not necessarily a bad thing.”

GE follows some of its giant corporate peers that are also looking to capitalize on the natural gas boom. ExxonMobil agreed to buy natural gas company XTO Energy for $31 billion last December. Royal Dutch Shell said in May that it will acquire East Resources, which has natural gas assets in two U.S. shale formations, for $4.7 billion.

GE had signaled it was ready to begin buying companies again, long a growth strategy for the company, but this is its first major purchase since the beginning of the financial crisis, according to a report by Nigel Coe, an analyst at Deutsche Bank.

GE didn’t say whether the deal’s value includes the assumption of Dresser’s debt, or provide further details

Dresser is based in Addison, Texas. It had earnings of $318 million on revenue of $2 billion last year, according to the company.

The deal requires regulatory approval.

GE shares rose 45 cents, or 2.7 percent, to $16.96 in midday trading.