General Electric, Siemens in fray for oil equipment maker Dresser Rand

General Electric, Germany's Siemens and a number of other companies are in the fray for oil equipment maker Dresser-Rand Industries, with any deal likely to be worth more than $6 billion.

AFP said citing sources that GE had had preliminary discussions with the Houston, Texas company, though they would not say whether GE intended making a formal offer.

According to earlier media reports in Europe, Germany's Siemens was set to launch a multi-billion-dollar bid for Dresser-Rand, even as Siemen's Swiss rival Sulzer had its eyes on the company as well.

Further, the Russian group Renova, is also involved in the deal make which had 5 per cent of Dresser-Rand, according to reports.

The development comes in the back drop the company enjoying a business surge on the back of US shale oil and gas drilling, which pushed its shares up 9.4 per cent to $79.91 yesterday, taking its market value to $6.1 billion.

According to a report in German weekly Manager Magazin, Siemens was prepared to pay over $80 a share.

The Wall Street Journal reports, citing people in the know of the deal, that Siemen's bid would likely edge out in value an earlier offer from Sulzer. Terms of Sulzer's offer were not disclosed.

According to analysts, Sulzer and Dresser-Rand would be complimentary if merged, though since the offer was expected to include stock it could lose out to a larger all-cash bid from Siemens.

Sulzer is a leading global pump manufacturing company, but like Dresser-Rand it also produces compressors, turbines and other rotating equipment. The two companies were also comparable in terms of revenue; Sulzer's total revenue last year was about $3.4 billion, while Dresser-Rand earned $3 billion.

According to Sulzer, headed by former Siemens chief Peter Loescher, it was "in nonexclusive discussions with Dresser-Rand regarding a potential transaction."

General Electric Co, which had plowed around $14 billion into oil- and gas-services businesses over the past several years, had looked at Dresser-Rand in the past and could make a bid, though a deal between the two companies was not likely, according to a person familiar with the matter.

A bid by Siemens for Dresser-Rand would align with Siemens CEO Joe Kaeser's aim to build the company's presence in the US energy market and capitalise on the shale-gas boom.

Dresser-Rand Company was formed on December 31, 1986, as an equally owned joint venture between Dresser Industries and Ingersoll Rand. Its traces its history to the 1880s, when it was formed from the merger of Solomon R. Dresser Company and the Clark Brothers Company in 1938.