General Electric signs $11bn deal with Wabtec
GE chief John Flannery has pledged to cut costs and refocus the manufacturer on key markets, such as aviation and energy
New York — General Electric (GE) agreed to merge its century-old locomotive business with rail-equipment maker Wabtec in a deal valued at $11.1bn, the biggest step yet in CEO John Flannery’s plan to shed unwanted units and revitalise the beleaguered manufacturer. GE will receive $2.9bn in cash while the company and its shareholders take a 50.1% stake in the combined entity, according to a statement on Monday. Wabtec shareholders will hold the rest after the tax-free transaction, which is expected to close early in 2019. GE put its rail unit on the market in 2017 in an effort to streamline operations and reduce the complexity that Flannery blames for deepening the company’s problems. Faced with one of the worst slumps in GE’s 126-year history, the CEO has pledged to cut costs and refocus the manufacturer on key markets, such as aviation and energy. The deal is transformative for Wabtec, which will roughly double its annual revenue by adding one of the world’s largest makers of freigh...
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