Siemens: Slide in Oil Prices No Reason to Rethink Dresser-Rand Deal

By Christopher Alessi

Siemens AG has no plans to walk away from a planned deal to acquire U.S. oil equipment manufacturer Dresser Rand Inc. despite the slide in oil prices, Chief Executive Joe Kaeser said on Tuesday.

In addition, the acquisition of the Houston-based company in a cash deal valued at $7.6 billion, including debt, should deliver bigger-than-expected cost savings and revenue gains for the German engineering group, Mr. Kaeser said.

"If we walked away from that deal, you would see a lot of happy competitors," Mr. Kaeser said at event for financial analysts in Berlin.

Falling oil prices reflect supply rather than demand "which is an encouraging sign this is all temporary," he said.

U.S. oil prices ended 4.2% lower on Monday at $63.05 a barrel, the lowest level since July 16, 2009.

Dresser Rand's installed customer base would allow it to achieve synergies 30% higher than initially announced, Mr. Kaeser said.

In September, Siemens said it expected to achieve EUR150 million ($185 million) in annual synergies by 2019 as a result of the deal. Dresser-Rand manufacturers compressors, gas turbines and engines.

The acquisition is part of Mr. Kaeser's broader strategy to expand U.S. operations and capitalize on America's growing energy sector, which is riding the shale-gas boom.

Write to Christopher Alessi at [e-mail]

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