Early Monday morning, General Electric (GE 1.05%) announced that it would be acquiring Lufkin Industries (NASDAQ: LUFK) for around $3.3 billion. This acquisition continues the trend that we have seen start with GE in 2007; since that time, it has spent $11 billion to purchase companies in the energy space.
Nothing artificial about what Lufkin brings to GE
What GE is getting with Lufkin Industries is a company that is heavily involved in artificial lift. This service has proven vital to the oil and natural gas industry due to its ability to increase well efficiency once pressure inside the well has dropped. Estimates are that 95% of wells worldwide utilize some form of artificial lift, so this segment could provide a nice boost to GE's business as global drilling continues to pick up.
