The largest manufacturer of oil-field equipment in the United States had planned to spin off its distribution business. The said business is in essence, it is the 'hardware store' for energy companies and is calculated to be worth USD3.3 billion.
Previously, the company had acquired a unit of Schlumberger Ltd and CE Franklin Ltd. According to National Oilwell Varco Inc Chairman and CEO Pete Miller, through a statement, "The company's distribution business now has the market size and the scale to operate as a standalone world class distribution company." The statement added that the transaction would be a 'tax efficient' spin off as the two businesses are listed on the public index.
Of the three units of National Ollwell, the distribution business is the smallest one, providing maintenance, repairs and supplies to other oil and natural gas operators. The company is able to generate USD3.93 billion in sales and had reported an operating profit of USD185 million, an increase of 37% from 2011. These figures were collated by Bloomberg.
The distribution business, operates in more than 415 areas and in 26 nations. The transaction is expected to be completed before midyear of 2014.
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