Dresser-Rand Signs Agreement to Sell to Siemens

HOUSTON (Sept. 21, 2014) – Dresser-Rand Group Inc. announced that it has entered into a definitive merger agreement with Siemens under which Siemens will acquire all of the outstanding shares of Dresser-Rand common stock for $83.00 per share in cash. The transaction is valued at approximately $7.6 billion, including the assumption of debt. The price represents a premium of 37.4 percent over Dresser-Rand's closing share price of $60.42 on July 16, 2014, the day before speculation in the press appeared regarding interest in Dresser-Rand. Additional per share cash consideration of $0.55 shall be applied on the first day of each month starting March 1, 2015, until the closing occurs. Siemens intends to operate Dresser-Rand as the company's oil and gas business retaining the Dresser-Rand brand name and its executive leadership team. In addition, Siemens intends to maintain a significant presence in Houston, which will be the headquarters location of the oil and gas business of Siemens. "As the premium brand in the global energy infrastructure markets, Dresser-Rand is a perfect fit for the Siemens portfolio. The combined activities will create a world-class provider for the growing oil and gas markets. With this Dresser-Rand will become 'the oil and gas' company within Siemens and fit right into our Siemens Vision 2020," said Joe Kaeser, President and CEO of Siemens AG. "After a thorough and competitive process, we are pleased to have reached this agreement with Siemens as it maximizes value and delivers significant benefits to all Dresser-Rand stakeholders," said Vincent R. Volpe Jr., Dresser-Rand's President and CEO. "Dresser-Rand shareholders will receive immediate and certain all-cash consideration for their shares at an attractive premium to the company's unaffected share price." Mr. Volpe added, "Given the vision Siemens has for Dresser-Rand as its oil and gas company, and its expressed wishes to build Dresser-Rand's product and service portfolio with some of the existing Siemens offerings that have previously been marketed separately into the oil and gas space, it is clear that this is a transaction that should create value for clients, as well as for both sets of shareholders, that would not have otherwise been achieved had Dresser-Rand not become part of the Siemens group. We are excited about the opportunity to continue on our journey to become the premier supplier of high speed rotating equipment and solutions for this industry and believe that the enhancements in offerings available to us in the form of the existing products and services from the Siemens group will serve as an accelerator for technological innovation, profitable growth and extended opportunities for our employees and the communities around the globe in which we operate. Simply stated, we see this as a unique opportunity to better serve our clients, employees and shareholders and are pleased to have Dresser-Rand placed in the central role for Siemens as it develops its position in oil and gas." "Our aim is to become the leading rotating equipment and process system integrator for the oil and gas industry. Dresser-Rand has strong presence in oil and gas, a reputation for technology leadership and innovation, and a talented and experienced leadership team. Our intention is to leverage these strengths by maintaining the existing company and brand name and selectively moving complementary products and services from the existing Siemens portfolio into Dresser-Rand enabling us to offer a much broader range of products, services and solutions to meet our customers' needs," said Lisa Davis, member of the Managing Board of Siemens AG. The transaction is expected to close in the summer of 2015 and is subject to Dresser-Rand shareholder approval, regulatory approval in the U.S., Europe and certain other jurisdictions, and other customary closing conditions. Under the terms of the merger agreement, Siemens has committed to take all necessary steps from a regulatory perspective to ensure that the transaction will be completed. Morgan Stanley & Co. LLC and Zaoui & Co. acted as financial advisors to Dresser-Rand. Wachtell, Lipton, Rosen & Katz, and Gibson, Dunn & Crutcher LLP, served as legal counsel to Dresser-Rand. The company's Board of Directors has adopted a limited duration shareholder rights plan. The plan is designed to assist the Board of Directors in maximizing shareholder value in connection with the sale of the company. The plan will not in any way prevent or restrict any person from making a superior proposal pursuant to the terms of the merger agreement. Pursuant to the plan, the Board of Directors declared a dividend of one preferred stock purchase right (each a "right" and collectively, the "rights") on each outstanding share of the company's common stock as of the close of business on October 2, 2014 (the "record date"). Each right, once exercisable, will entitle shareholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at a purchase price of $300.00 per right, subject to adjustment. The rights will be exercisable only if a person or group of affiliated or associated persons (other than Siemens or any of its affiliates or associates acting pursuant to the merger agreement) acquires beneficial ownership of 10 percent or more of the company's common stock. The plan provides that the ownership of shareholders that beneficially own 10 percent or more of the company's common stock on the date of adoption of the plan will be grandfathered, but the rights would become exercisable if at any time any such shareholder increases its ownership percentage by 1 percent or more. Derivative interests in the company's common stock, such as swap arrangements, regardless of whether such arrangements carry with them the right to control voting or disposition of the underlying securities, are also considered beneficial ownership of the underlying common stock for purposes of the plan. Additional details about Rights plan will be included in a Form 8-K to be filed by the Dresser-Rand with the U.S. Securities and Exchange Commission. Dresser-Rand supplies rotating equipment solutions to the worldwide oil, gas, petrochemical and process industries. Siemens works in electronics and electrical engineering, operating in the fields of industry, energy and healthcare as well as providing infrastructure solutions, primarily for cities and metropolitan areas.