updated 1/8/2007 9:52:42 AM ET 2007-01-08T14:52:42

General Electric Co. said Monday it agreed to buy oil services company Vetco Gray for $1.9 billion from private equity funds Candover Partners Ltd., 3i Group PLC & JP Morgan Partners LLC.

Completion of the transaction is subject to governmental and regulatory approval and is expected in early 2007, GE said in a statement.

Vetco Gray provides drilling, completion and production equipment for on- and offshore oil and gas fields. The business, which is forecast to generate over $1.6 billion of sales in 2006, has 5,000 employees with key centers in Houston, Britain, Norway and Singapore.

"This acquisition enables GE to seize faster growth in a rapidly expanding global business," said Claudi Santiago, chief executive of GE Oil & Gas. "Vetco Gray expands the portfolio of products, services and solutions available to one of the world's most dynamic industries."

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