General Electric Company (GE) said it has acquired the power and grid businesses of French engineering group Alstom for €12.35 billion ($13.8 billion), following the regulatory approval of the deal in over 20 countries including the EU, US, China, India, Japan and Brazil.

GE had reached an agreement with Alstom last year for the group's largest-ever industrial acquisition.

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 €9.7 billion ($10.6 billion), said the US major.

This includes working capital usage of approximately €0.6 billion in 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 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.

In a related development, GE said it had also completed the sale of its rail signaling business to Alstom for approximately $800 million.

Commenting on the deal, Jeff Immelt, chairman and CEO, said: "The completion of the Alstom power and grid acquisition is another significant step in GE’s transformation."

“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,” he added.

The US major said customers will realise immediate benefit from the combination of GE and Alstom, including the 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, it stated.

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 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 begun, remarked Immelt.

The GE Capital exit strategy is ahead of plan, with $126 billion of signed dispositions, he stated.

"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," he added.-TradeArabia News Service