In a concerted effort to augment presence in the oil and gas
industry, GE Oil & Gas, an operating unit of
General Electric Company
), recently completed the acquisition of artificial lift
technology provider Lufkin Industries Inc. (LUFK) for about $3.3
billion. In addition to strengthening the artificial lift
capabilities of General Electric, the strategic acquisition also
fortifies its turbomachinery product portfolio by leveraging
industrial gears and engineered bearings designed by Lufkin.
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With 9 manufacturing facilities and a global network of over 110
service centers, Lufkin manufactures a broad portfolio of
artificial lift equipments that are vital for increasing the
output of oil-producing wells. Industry report suggests that
artificial lifts are utilized in 94% of around 1 million
oil-producing wells across the globe to lift resources to the
surface in reservoirs with low pressure and improve the
efficiency of naturally-flowing wells. Market research-based
consulting firm Spears & Associates further expects the
global artificial lift sector to reach $13 billion in 2013,
making the acquisition appear to be a masterstroke by General
On its own, General Electric already has an active presence in
this sector with products like electric submersible pumps (ESP).
The Lufkin acquisition has further expanded its capabilities by
adding rod lift, gas lift, plunger lift, hydraulic lift,
progressive cavity pumps, and a wide array of well controls and
software to its kitty. In addition, General Electric is also
likely to benefit from Lufkin's production automation approach
for optimal use of resources.
Serving over 100 million customers worldwide, General Electric is
one of the largest and the most diversified technology and
financial services corporations in the world, with products and
services ranging from aircraft engines, power generation, water
processing, and security technology to medical imaging, business
and consumer financing, media content and industrial products.
Its 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
companies in the industry worth mentioning include
Compass Diversified Holdings
Honeywell International Inc.
), each carrying a Zacks Rank #2 (Buy).