NEW YORK — General Electric Co. has agreed to buy the oilfield equipment maker Lufkin Industries Inc. for $3.1 billion, furthering an effort by GE to increase its oil and gas operations.
GE said Monday that it would pay Lufkin shareholders $88.50 per share, a 38 percent premium over Lufkin’s closing price on Friday of $63.93.
The companies valued the deal at $3.3 billion, which includes $200 million in debt to be assumed by GE.
CEO Jeff Immelt is in the process of transforming GE from a sprawling conglomerate to one that is more tightly focused on providing services and equipment to industrial customers. The company has shed divisions such as NBC Universal and is shrinking its banking operations.
Immelt indicated the company would use some of its enormous cash balance to buy mid-sized companies that fit well into what the company already does. GE makes aircraft engines, natural gas-fired turbines and generators, wind turbines, medical devices, and locomotives.
GE is putting particular focus on oil and gas, hoping to capitalize on the boom in extracting oil from difficult places. Lufkin makes pumping equipment that helps drillers extract more oil out of older fields or ones that need to be pumped because the oil and gas underground is not under enough pressure to be forced to the surface naturally.