GE and Petrobras Sign Largest Subsea Wellhead Systems Deal Ever
When you see the largest deal of a kind announced ever along with it being worth more than $1 billion, it may cause some heads to turn. Be advised that it takes many more contracts that are $1 billion or more to move the needle at General Electric co. (NYSE: GE). Still, today's news announcement from the company is that it has signed a record $1.1 billion deal with Petrobras (NYSE: PBR) for some 380 subsea wellhead systems valued at $1.1 billion is a rather large deal.
The report from GE Reports shows that Petrobras will install the systems in various oil and gas fields off the coast of Brazil. It further shows that GE is not backing off in the oil and gas efforts it has embarked on since its acquisition of the offshore oil production equipment supplier VetcoGray in 2007 and since its acquisition of pipeline manufacturer Wellstream in 2011. GE noted, "The new contract builds on a $250 million subsea deal GE and Petrobras signed in 2009, also the world's largest at the time in terms of number of wellheads."
Petrobras is a $156 billion company by market cap and General Electric's market cap is $234 billion (per Yahoo! Finance). To show just why it takes so much to move the needle for a conglomerate like GE, the Thomson Reuters consensus estimate for 2012 revenues is just over $147.5 billion.
GE shares are currently up close to yet another multi-year high. Shares are up 0.6% at $22.19 and the 52-week range is $14.02 to $22.37.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Conglomerates Tagged: GE, PBR