LONDON â€" The Swedish engineering company Sandvik said on Tuesday that it had reached an agreement to acquire the Texas oil drilling equipment company Varel International Energy Services for about $740 million.
The deal allows Sandvik to enter a new product area: drilling equipment for the oil and gas industry.
The Swedish company already provides specialized equipment for the mining and construction industries, as well as metal-cutting tools and other products used in the aerospace, automotive and chemical industries.
“The acquisition continues to position Sandvik in attractive growth segments where we will deliver solutions that increase customers’ productivity,†said Olof Faxander, Sandvik’s president and chief executive.
The transaction is subject to regulatory approval.
Founded in 1947, Varel, a privately held company, had revenue of about $340 million last year and employs about 1,300 people. It has manufacturing plants in Texas, Mexico, Russia and France.
Varel “will operate as a stand-alone entity within the business area Sandvik Venture and, as a result, we anticipate only positive impact to product delivery and customer support,†said Jim Nixon, Varel’s president and chief executive
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