General Electric Company (NYSE:GE) announced Monday of its plans to add the maker of industrial lifts to its oil and gas businesses by acquiring Lufkin Industries, Inc. (NASDAQ:LUFK) for about $3.38 billion.

According to the terms of the deal, General Electric Company (NYSE:GE) will pay a 38 percent premium i.e.  $88.50 a share in cash to Lufkin’s Friday closing price. The deal will help the company service oil and gas wells at any stage of production, said GE.

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The company told that it is paying a multiple of about 13.5 times the estimates 2013 earnings before interest, taxes, depreciation and amortization.

Advanced technologies coupled with new drilling practices are an important breakthrough for the oil and gas industry, said Daniel C. Heintzelman, chief executive of G.E.’s oil and gas unit.

“In turbomachinery, Lufkin is already one of our suppliers for turbo gearing and specialty bearings products, and this acquisition allows us to further utilize their technologies and expertise for our customers,” he added.

G.E.’s oil and natural gas unit is one of the fastest growing segments within the company with sales up 57 percent to $15.2 billion since 2009. GE’s Chief Executive Officer Jeffrey Immelt further improved the expansion with the $11 billion purchases during a six-month period ended in 2011.

The acquisition of Lufkin is the latest addition to the oil and natural gas unit and is expected to boost the acquisition of the John Wood Group’s well services business in 2011.

To enhance its energy capabilities, last week General Electric Company (NYSE:GE) announced an investment of $110 million for a research lab in Oklahoma City with an objective to improve extraction of hard-to-reach oil and gas deposits, including hydraulic fracturing and horizontal drilling. The research center will employ around 125 engineers and scientists in the coming months.

Texas-based Lufkin Industries, Inc. (NASDAQ:LUFK), which deals in lift equipment for oil and gas platforms, posted a net income of $81.9 million last year, marking its third consecutive year of growth, backed by revenues of $1.3 billion. The company has operations in about 40 countries and employs around 4500 employees. The Texas based firm produces artificial lift equipment with the help of its 110 service centers and nine manufacturing facilities.

In New York, before the start of regular trading, General Electric Company (NYSE:GE) stocks were up 0.5 percent to $23.04. This year up till April 5, the shares have gained 9.2 percent against 8.9 percent for Standard & Poor’s 500 Index.

The deal is expected to close in the second half of the year.