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Siemens mulls bid for Dresser Rand - reports

Published 19/09/2014, 13:55
© Reuters Photographer takes picture of Siemens logo at Germany's Siemens AG headquarter during board member meeting in Munich
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FRANKFURT (Reuters) - Germany's Siemens (DE:SIEGn) is considering a bid for compressor and turbine maker Dresser-Rand (N:DRC) that could potentially derail a merger between Dresser-Rand and Swiss pump maker Sulzer (S:SUN), according to several media reports on Friday.

The Financial Times and Bloomberg reported that Siemens' supervisory board may vote on whether to table a bid at a meeting next week, with Bloomberg citing an offer of more than $85 (51.88 pounds) a share. Siemens declined to comment.

Dresser-Rand shares closed on Thursday at $73 and were indicated up 13.4 percent at $82.5 in premarket trade.

Shares in Sulzer, whose chairman is former Siemens CEO Peter Loescher, were trading down 3.7 percent at 1223 GMT (01:23 p.m. BST) on fears a move from Siemens could derail its plans for a potential merger with Dresser-Rand.

Sulzer said on Wednesday it was in non-exclusive talks with Dresser-Rand.

Germany's Manager Magazin first reported on Friday that Siemens could offer more than $6.1 billion (3.72 billion pounds), or $80 per share, for Dresser-Rand.

Dresser-Rand has been rumoured as a takeover target for large industrial companies such as Siemens in recent months.

While Siemens has been working with advisers to assess a potential bid for years, it has not made a takeover offer for the company, people familiar with the matter said.

Sulzer, and other suppliers of pumps and valves for mining, oil and construction firms are considered ripe for consolidation. Scotland's Weir Group (L:WEIR), for example, tried to buy rival Metso (HE:MEO1V) but the deal fell apart over price.

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A merger with Sulzer would combine Dresser-Rand's compressors and turbines serving the oil and gas industry with Sulzer's industrial pumps, giving the enlarged group a bigger footprint at a time when a North American drilling boom is boosting demand for energy services and equipment.

(Reporting by Georgina Prodhan Editing by William Hardy and Mark Potter)

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