GE oil chief sees more growth despite Alstom deal
By Ernest Scheyder and Lewis Krauskopf
NEW YORK (Reuters) - General Electric Co's (GE.N: Quote) $16.9 billion bid for Alstom SA's (ALSO.PA: Quote) power business will do little to slow down GE's oil and gas division, according to the head of the unit, even though such a transaction could preclude any more big deals by the U.S. conglomerate until after next year.
"We're looking to continue the pace of growth and continue to grow in line with the market, if not ahead of the market, and increase our presence within GE," Lorenzo Simonelli, president of GE Oil & Gas, said in an interview.
As the energy boom in North America's shale fields has gathered pace, Chevron Corp (CVX.N: Quote) and other GE customers have been snapping up wellhead bores, compressors and sensors made by the unit, now GE's third-largest by revenue.
Revenue at the unit has jumped more than 80 percent to nearly $17 billion over the past four years. During that time, GE Oil & Gas has struck a series of deals, including the $3 billion acquisition of Lufkin, which makes oil-field pumps that are the workhorses of the industry.
But the sheer size of the Alstom bid could mean less investment at other GE units, at least in terms of big acquisitions. After all, GE executives promised the deal, if consummated, would effectively use up most of what the company has set aside for mergers and acquisitions this year and next.
But Simonelli shrugs off such concerns. "2015 is just around the corner," he said. "It's not a long time, so really it doesn't disturb me too much."
Simonelli expects his division, which posted profit of $2.2 billion last year on revenue of $17 billion, to increase revenue at a high single-digit percentage rate in the coming years. Continued...