In a move that will boost its presence in oil services, the biggest US conglomerate General Electric Co. today announced its decision to buy a unit of John Wood Group for about $2.8 billion (£1.75 billion). Woods Group said the deal – which will require shareholder approval, should complete by the end of the year.
John Wood group said it will return at least $1.7 billion of the deal money to shareholders.
The current deal is GE’s push towards expanding its services in the oil and gas sector. GE had announced a deal earlier in December to acquire Wellstream Holdings for $1.3 billion.
GE has been shifting its focus to heavy manufacturing in recent years under CEO Jeff Immelt and has already reached an agreement to sell its media unit and scale down operations of its finance arm GE Capital. The company plans to spend around $30 billion in coming years on acquisitions alone.
“The significant investment programme in Well Support over the years and the expertise and dedication of all our people is reflected in the price achieved”, said Allister Langlands, chief executive of John Wood Group.
“I believe that GE will be a good owner of the business and, with its scale and reach, be able to accelerate the future international growth of the business”, he added.
This is the largest divestment by the John Wood Group, which have grown inorganically over the years through acquisitions. For example, in December the group agreed to buy another Aberdeen based company PSN for £600 million.
GE will absorb 3,800 employees spread across 20 centres in the Well Support division of John Wood, once the deal gains shareholder and regulatory approval.