General Electric to Acquire Cameron Biz - Analyst Blog

By Zacks Equity Research,

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Diversified conglomerate General Electric Company ( GE ) recently agreed to acquire Cameron International Corporation's ( CAM ) Reciprocating Compression division for $550 million. The acquisition is expected to close later this year.

Post acquisition, Cameron's Reciprocating Compression division will be a part of the Downstream Technology Solutions business of GE's Oil & Gas segment. This acquisition is likely to complement General Electric's distributed gas portfolio and downstream technology solutions business. While GE's Oil & Gas' focused on low horsepower units that are used predominately in gas lift applications, the acquired business will add higher horsepower models that are used in gas gathering, processing and transmission.

The services and geographic presence will expand the company's distributed gas portfolio and enhance shale capability and services expertise for its customers. The development of shale oil and gas fields, particularly in North America, has increased demand for high-speed reciprocating compressors. This acquisition will position General Electric to serve the industry globally as shale continues to develop in other regions of the world. Additionally, the combined business is likely to offer services and packaged solutions for both the traditional downstream and the evolving unconventional oil and gas space.

Oil & Gas is considered to be one of the fastest-growing businesses of General Electric with orders rising from less than $1 billion per year in 1994 to nearly $20 billion to date and profits growing at an average 16% over the past three years.

General Electric is one of the most diversified technologies and financial service corporations in the world. The company's segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital.

General Electric currently has a Zacks Rank #3 (Hold). Other stocks that look promising in the industry and are worth a look now include Carlisle Companies Inc . ( CSL ) and Crane Co . ( CR ), both carrying a Zacks Rank #2 (Buy).

CAMERON INTL (CAM): Free Stock Analysis Report

CRANE CO (CR): Free Stock Analysis Report

CARLISLE COS IN (CSL): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CAM , CR , CSL , GE

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