Siemens AG confirmed recently it will purchase United States oil services company Dresser-Rand for $7.6 billion.
The acquisition by the German engineering giant provides the company with a fast track into the US fracking craze, which expects to launch the company’s oil and gas business in the US shale market when the deal is finalized in 2015.
Siemens Chief Executive Joe Kaeser said in a statement on Monday, “As the premium brand in the global energy infrastructure market, Dresser-Rand is a perfect fit for the Siemens portfolio. The combined activities will create a world-class provider for the growing oil and gas markets.”
A study by McKinsey and Co. claims the shale industry in the United States may contribute as much as $690 billion to GDP and create 1.7 million jobs by 2020, resulting in companies like Siemens wanting to be a part of the prosperity.
Dresser-Rand’s market value is minuscule at $6.12 billion when compared to Siemens’ much larger $85 billion, but purchasing Dresser-Rand which designs, manufactures and sells all types of services in oil and gas discovery and refining immediately gives Siemens credibility in the American energy sector.