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GE announced today that it made a binding offer to acquire the thermal power, renewable energy and electricity grid businesses of the French engineering conglomerate Alstom for $13.5 billion in cash.

GE said in a press release that the Alstom board “positively received” its offer and appointed a committee of independent directors to review the bid by June 2. The deal is expected to close in 2015.

Jeff Immelt, GE chairman and CEO, said in a statement that the strategic bid would allow GE to boost its presence and scale in the growing global power generation sector. Immelt said power and water was “core to the future of GE” and one of the company’s “higher growth and [higher] margin industrial segments.”

The International Energy Agency estimates that global electricity generation will double by 2030 (see infographic). More than 50 percent of new power capacity over the next decade will come from gas and steam turbines, the technology that forms the crux of the deal.

Future of Power


Patrick Kron, Alstom’s chairman and CEO, said that “the combination of the very complementary energy businesses of Alstom and GE will create a more competitive entity to better service customer needs.” He said that Alstom’s employees would join “a well-known, major global player with the means to invest in people and technology to support worldwide energy customers over the long term.”

Kron said that the deal would allow Alstom to expand its transport business as a standalone company. A strong balance sheet would give it the ability to capitalize on opportunities in the dynamic rail transport market.


Immelt said that Alstom’s energy businesses were “very complementary in technology, operations, and geography” to GE’s power and grid businesses. “We expect a collaborative and prompt integration that will yield efficiencies in supply chain, service infrastructure, commercial reach, and new product development,” Immelt said.

GE expects that fast integration will generate more than $1.2 billion in annual synergies within five years and that the transaction will be “immediately accretive” for GE shareholders.

Alstom’s power business had €11 billion in sales ($15 billion) in fiscal year 2013 and employes 46,000 workers in France, U.K. and other countries.

“Alstom, like GE, is a company built on engineering, innovation and technology,” Immelt said. “We respect and value the deep industry and technology expertise of Alstom employees and expect them to add to our proven track record of developing talent and leadership in France and globally.”

This is not the first time the two companies meet. In fact, both GE and Alstom grew out of common roots.

GE Alstom history



The content of this ELE News  article is from a blog post by GE REPORTS