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GE Transportation to merge with Wabtec

22 May 2018

Wabtec Corporation announced that it has entered into a definitive agreement to combine with GE Transportation, a unit of General Electric Company. The transaction is valued at approximately $11.1 billion.

Under the agreement, which has been approved by the Boards of Directors of Wabtec and GE, GE will receive $2.9 billion in cash at closing and GE and its shareholders will receive a 50.1% ownership interest in the combined company, with Wabtec shareholders retaining 49.9% of the combined company.

GE Transportation, which generated revenue of $4.7 billion, is a leading manufacturer of freight locomotives and internal combustion engines used in the rail, mining, marine, stationary power and drilling industries. Wabtec—also known as Westinghouse Air Brake Technologies Corporation—has been supplying brakes for GE locomotives.

Once the deal closes, GE Transportation will become a wholly owned subsidiary of Wabtec, which would become a Fortune 500 company with revenues of more than $8 billion. The combined company would have about 27,000 employees, including 9,000 who now work for GE.

GE has taken several actions to reduce costs and improve its performance, as the company’s stock has lost about half its value in the last year. GE has divested its plastics business, NBCUniversal, most of its GE Capital business, and combined its oilfield services business with Baker Hughes.

Source: Wabtec