DealZone

GE CEO keen on oil, gas deals

October 15, 2010

General Electric Co aims to focus its takeover spending on makers of equipment used in oil and natural gas production, an area where the largest U.S. conglomerate’s CEO sees “a bunch” of opportunities.

The company’s deal last week to pay $3 billion for Dresser Inc, a maker of gas engines used in oil production and mining is just its first move in a potential surge of deal-making in the oil and gas sector, Chief Executive Jeff Immelt told investors in a conference call on Friday after the company reported third-quarter results.

Jeff Immelt

Jeff Immelt

“What you saw last week is what we’ll continue to try to do,” Immelt said. “We like energy. We think we’ve got a good-executing team there and in the $1 billion to $3 billion range, if you think about energy and oil and gas, there’s a lot of companies in that range … We can chunk through and do a bunch of deals in that range.”

Still, a week after the company’s $1.2 billion offer for Britain’s Wellstream Holdings was rebuffed, Immelt pointed out that he’ll return cash to shareholders before he overpays for an acquisition.

“There are good opportunities out there, we think,” Immelt said. “If we don’t see good opportunities, we’ll increase the dividend and do more buybacks.”

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