Siemens to buy Dresser-Rand

Siemens AG and Dresser-Rand Group Inc. (Dresser-Rand) have entered into a definitive merger agreement under which Siemens will acquire all of the outstanding shares of Dresser-Rand common stock for $83.00 per share in cash. The transaction is valued at approximately $7.6 billion, including the assumption of debt.

Dresser-Rand is a global supplier of rotating equipment and aftermarket parts and services. The price represents a premium of 37.4 percent over Dresser-Rand's closing share price of $60.42 on July 16, 2014, the day before speculation in the Press appeared regarding interest in Dresser-Rand. Additional per share cash consideration of $0.55 shall be applied on the first day of each month starting March 1, 2015, until the closing occurs.

Siemens intends to operate Dresser-Rand as the company's oil and gas business retaining the Dresser-Rand brand name and its executive leadership team. In addition, Siemens intends to maintain a significant presence in Houston, which will be the headquarters location of the oil and gas business of Siemens.

Joe Kaeser, President and CEO of Siemens AG said the combined activities will create “a world-class provider” for the growing oil and gas markets. He said, “With this, Dresser-Rand will become 'The oil and gas' company within Siemens and fit right into our Siemens Vision 2020."

Vincent R. Volpe Jr., Dresser-Rand's President and CEO said this agreement with Siemens maximizes value and delivers significant benefits to all Dresser-Rand stakeholders. “Dresser-Rand shareholders will receive immediate and certain all-cash consideration for their shares at an attractive premium to the Company's unaffected share price."

Volpe added, "It is clear that this is a transaction that should create value for clients, as well as for both sets of shareholders, that would not have otherwise been achieved had Dresser-Rand not become part of the Siemens group.”

Conditions and Approvals

The transaction is expected to close in the summer of 2015 and is subject to Dresser-Rand shareholder approval, regulatory approval in the U.S., Europe and certain other jurisdictions, and other customary closing conditions.  Under the terms of the merger agreement, Siemens has committed to take all necessary steps from a regulatory perspective to ensure that the transaction will be completed.

Morgan Stanley & Co. LLC and Zaoui & Co. acted as financial advisors to Dresser-Rand. Wachtell, Lipton, Rosen & Katz, and Gibson, Dunn & Crutcher LLP, served as legal counsel to Dresser-Rand.