General Electric has struck a $3 billion deal to acquire pump maker Lufkin Industries Inc., likely providing a boost to the company's Oklahoma City-based artificial lift business.
The deal announced Monday will broaden GE Oil and Gas' artificial lift capabilities beyond electric submersible pumps. It is expected to close in the second half of this year, subject to approval by regulators and Lufkin's shareholders.
Lufkin is a leading provider of artificial lift technology, which is used in 94 percent of 1 million oil-producing wells around the world.
“Advanced technologies, combined with new drilling practices, are revolutionizing the oil and gas industry,” GE Oil and Gas CEO Daniel C. Heintzelman said. “The artificial lift segment is at the heart of critical changes that are helping producers maximize well potential, which translates into increased output at lower operational cost.”
The Lufkin deal will allow GE's fastest-growing business unit to provide global oil and natural gas customers with a complete portfolio of offerings that can boost production.
“Lufkin's world-class people, equipment and services fit perfectly in our portfolio and will enable us to offer a wide range of artificial lift solutions to our customers in this fast-growing artificial lift sector,” Heintzelman said. “In turbomachinery, Lufkin is already one of our suppliers for turbo gearing and specialty bearings products, and this acquisition allows us to further utilize their technologies and expertise for our customers.”
GE announced last week it would build a global oil and gas research center in Oklahoma. The $110 million center is expected to create 125 jobs.
Oklahoma City is home to the company's artificial lift business, which employs more than 550 people to help make new oil fields more efficient and older fields productive again.
“GE sees the acquisition as helping to grow both Lufkin and GE Artificial Lift,” spokesman Sean Gannon said. “The technology portfolio at both companies is very complementary, and as GE continues to invest in new technologies and global growth in the artificial lift segment, we see both companies as continuing to grow. So it's a win-win for both businesses.”