GE has announced it has completed the $10.6bn acquisition of Alstom’s power and grid businesses, the company’s largest-ever acquisition.
The completion of the transaction follows the regulatory approval of the deal in over 20 countries and regions including the EU, US China, India, Japan and Brazil.
GE reached an agreement with Alstom in 2014 to purchase Alstom’s power and grid businesses for €12.35bn. 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 €9.7bn (approximately $10.6bn).
GE is targeting $3bn in cost synergies in year five and strong deal returns.
Jeff Immelt, chairman and CEO, GE said, “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.”
With the completion of its Alstom acquisition, GE Power & Water and Alstom Power have combined to form GE Power. Steve Bolze, will serve as president and CEO of GE Power, leading more than 65,000 employees in over 150 countries with estimated revenue of $30 billion.
The company statement asserted the new business to be a world-class supplier of total power plant and life cycle solutions that can support equipment from multiple suppliers. GE Power provides a diverse portfolio of technologies and suite of services that help make power more affordable, reliable and sustainable.
“We now offer utility and industrial power plant operators even more complete, customized ‘one-stop shop’ solutions—not just for developing new stations but also optimized life cycle support for existing facilities to support local energy security. Our portfolio of technologies include the world’s largest and most efficient gas turbine—the HA, full power plant components, boilers, steam turbines, reciprocating engines and more,” Steve Bolze said. “Being a digital industrial business, we also offer digital and software solutions, specifically our Digital Power Plant, which helps our customers increase output, improve efficiency, lower operating costs, improve integration of renewable energy and reduce unplanned downtime.”
GE Power’s six businesses and line of leadership were announced as follows:
- Power Services headquartered in Baden, Switzerland, and led by Paul McElhinney.
- Gas Power Systems headquartered in Schenectady and led by Joe Mastrangelo.
- Steam Power Systems headquartered in Baden, Switzerland, and led by Andreas Lusch.
- Distributed Power headquartered in Jenbach, Austria, and led by Lorraine Bolsinger.
- GE Hitachi Nuclear Energy headquartered in Wilmington, North Carolina, and led by Jay Wileman, succeeding Caroline Reda who will now head up Power Services’ North America region.
- Water & Process Technologies headquartered in Trevose, Pennsylvania, and led by Heiner Markhoff.
In its email statement the company also mentioned current projects bearing the seal of that synergy, including:
- 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, and 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.