Acquisition

GE completes acquisition of Alstom Power and Grid Businesses

Press Release
04/11/2015 13:22
GE completes acquisition of Alstom Power and Grid Businesses Imagem: Divulgation Visualizações: 1589 (0) (0) (0) (0)

GE announced on monday (2 November) that it has completed the acquisition of Alstom’s power and grid businesses. The completion of the transaction follows the regulatory approval of the deal in over 20 countries and regions including the EU, U.S., China, India, Japan and Brazil. It is GE’s largest-ever industrial acquisition.

 

GE reached an agreement with Alstom in 2014 to purchase Alstom’s power and grid businesses for €12.35 billion. Adjusting for the joint ventures announced in June 2014 (renewables, grid, and nuclear), changes in the deal structure, price adjustments for remedies, net cash at close, and including the effects of currency, the purchase price is €9.7B (approximately $10.6B). This includes working capital usage of approximately €0.6B in the month of October. GE expects the deal to generate $0.05-0.08 of earnings per share in 2016 and $0.15-0.20 of earnings per share by 2018. GE is targeting $3.0 billion in cost synergies in year five and strong deal returns. The overall economics and strategic rationale remain the same as GE announced in April 2014.

 

“The completion of the Alstom power and grid acquisition is another significant step in GE’s transformation,” said Jeff Immelt, chairman and CEO, GE. “The complementary technology, global capability, installed base, and talent of Alstom will further our core industrial growth. We are open for business and ready to deliver one of the most comprehensive technology offerings in the energy sector for our customers.”

 

Customers will realize immediate benefit from the combination of GE and Alstom, including these current projects:

PSEG Sewaren (New Jersey combined cycle power plant): GE 7HA gas turbine + Alstom heat recovery steam generator (HRSG)

Punjab Pakistan Bhikki (Pakistan combined cycle power plant): two GE 9HA gas turbines + Alstom steam turbine

Exelon Power Plants (Texas power projects): four GE 7HA gas turbines + four Alstom HRSGs

Chempark (Leverkusen, Germany combined heat and power project): GE 9HA gas turbine.

 

In addition, GE and Alstom are both preferred bidders for a combined cycle plant project in Asia that would use two GE 7HA gas turbines, two Alstom HRSGs and one Alstom steam generator, and Alstom is the preferred bidder for Arabelle steam turbines in two UK nuclear reactors; the preferred bidder for boilers, steam turbines and generators a clean coal project in the Middle East; and has successfully delivered India’s first 800 kV High Voltage Direct Current (HVDC) power transformer for the Champa-Kurukshetra project.

 

GE also announced today it has completed the sale of its rail signaling business to Alstom for approximately $800 million.

 

GE continues to execute its strategy to become a simpler, more focused company. In addition to the Alstom acquisition, the split-off of Synchrony Financial has commenced; the GE Capital exit strategy is ahead of plan, with $126 billion of signed dispositions; the recent formation of GE Digital is consolidating all digital capabilities across the company to provide customers with the best industrial solutions and software; and GE is winning in the marketplace and delivering strong financial results.

 

A call will be held to update investors on December 3, 2015. Visit www.ge.com/investor.

 

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