Siemens & Sulzer vying to merge with Dresser-Rand Group

On Behalf of Dunlap Fiore, LLC |

The Louisiana business community may find it interesting to learn that European manufacturer Siemens has signaled its interest in acquiring Dresser-Rand Group, Inc., another European company, as it aims to expand its oil and gas portfolio. Dresser-Rand is one of Europe’s largest manufacturers of turbines and industrial compressors that are designed and built to work exclusively for the oil and gas industry. According to reports, Siemens Chief Executive Officer has been eyeing Dresser-Rand for the last few years.

In fact, Siemens CEO has indicated that its needs to take advantage of the recent growth in the energy sector has been fuelled primarily by the increase in shale gas extraction, which, unlike natural gas, must be extracted by hydraulic fracturing. According to reports, Siemens is considering a potential acquisition offer that will total over $6.5 billion.

However, according to business analysts, the timing for the acquisition couldn’t be any more precarious, since Dresser-Rand Group Inc. is currently in talks over a possible merger with Sulzer, an U.S. company that makes oil-and-gas equipment. If Siemens were to follow through with the acquisition plan, its opening gambit may very well be a hostile acquisition, since a potential merger is currently being worked out between Dresser-Rand and Sulzer.

The growth in unconventional oil extraction has resulted in a lot of interest in Dresser-Rand, because the equipment that they manufacture is tailored for use by the energy industry to extract and process shale oil. What makes the company particularly attractive is the fact that they have the largest installed base of compressors that serve the energy industry.

With two different businesses vying to merge with the same company, the legalities surrounding the potential hostile acquisition or merger can be very complex for all parties involved. Seeking the expert advice of a business law firm knowledgeable about such matters may be the linchpin for success.

Source: Bloomberg, “Siemens Said to Prepare Counteroffer for Dresser-Rand,” Alex Webb, Aaron Kirchfield and Patrick Winters, Sept. 19, 2014