GE’s Acquisition of Alstom’s Power and Grid Business is Official

General-Electric-Alstom (1)

Following regulatory approval of a $10.6 billion transaction in over 20 countries and regions, GE’s acquisition of Alstom’s energy who recently supplied transformers for the largest floating power plant activities is now complete.

GE and Alstom sealed the deal first proposed in early 2014 with the signing of a 1,500-page “master agreement.” GE had initially proposed buying Alstom’s lucrative business for €12.35 billion, but following adjustments for the joint ventures announced in June 2014 as they pertain to the entities’ renewables, grid, and nuclear activities, changes in deal structure, and other adjustments, the final purchase price is €9.7 billion ($10.6 billion).

The entities struggled to woo governments in several countries and to finally garner more than 20 authorizations of the transaction, including the U.S, China, India, Japan, and Brazil, to seal the deal.

The deal also includes the sale of GE’s rail signaling business to Alstom for $800 million. It means that Alstom, the behemoth French maker of power equipment and grid software solutions—a company on whose technology the world once depended on for 25% of its power production capacity, from gas, to coal, to wind—will from Nov. 2 entirely refocus its activities on rail transport.

“We managed to secure a win-win deal with General Electric, which protects the interests of employees and customers in the Energy businesses, while reinforcing Alstom’s positioning in the transport industry,” said Alstom CEO Patrick Kron on Nov. 2.Alstom today holds leadership positions on a globally growing rail market and will rely on a solid financial base to support its growth strategy.”

The deal is GE’s biggest transaction ever. GE’s head Jeff Immelt said GE’s acquisition of Alstom’s complementary technology, global capability, installed base, and talent meant immediate benefits for customers, including for current projects using GE 7HA gas turbines and Alstom’s heat recovery steam generators (HRSGs) or steam turbines. It is also a boon for a number of proposed projects.

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. Alstom is also the preferred bidder for Arabelle steam turbines in two UK nuclear reactors, and the preferred bidder for boilers, steam turbines, and generators for a coal project in the Middle East, GE noted.

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