GE pays $45bn for Honeywell
In a major expansion of its business, General Electric has announced that it is to buy Honeywell of the US in a $45bn deal. Honeywell, which merged with AlliedSignal in late 1999, makes equipment for aerospace systems, power generation, transportation and factory automation, as well as specialty chemicals, plastics, fibers and other industrial materials.
GE Chairman and CEO John Welch will stay on in his position through the Honeywell transition until the end of 2001. He had been due to step down from his post in April 2001.
Honeywell’s business units include Honeywell Power Systems, which recently introduced the Parallon 75 microturbine-based turbogenerator aimed at on-site and distributed power applications. GE says it will use a ‘GE-Honeywell’ brand name in some key product lines.
As part of the agreement, Honeywell shareholders will receive 1.055 shares of GE stock in exchange for one Honeywell share. Both companies have approved the deal, which is expected to be complete in early 2001.
Honeywell is valued at $25bn, and employs around 120 000 people in 95 countries.
Lindahl steps down
ABB has announced that Gàƒ¶ran Lindahl, its president and CEO, will be stepping down from his post in January 2001. He will be replaced by Jàƒ¶rgen Centerman, head of ABB’s automation business.
The news came as ABB reported solid earnings for the first nine months of the year, with net income up 16 per cent and group orders up 13 per cent. Earnings in its automation group rose 33 per cent.
Lindahl has served as ABB’s CEO for four years, and has spearheaded the company’s transition from heavy engineering to hi-tech IT-related businesses. He said that after 30 years with ABB, it was the right time to hand over to a younger leader with a true IT profile. Lindahl will continue to be a member of the ABB board.
“The first steps in transforming ABB have been taken. Our organization has responded well, and there is now a strong bottom-up drive for even faster change,” said Lindahl. “I now feel it is the right time to hand over in order to safeguard a continued good development.”
ABB is continuing to expand its offerings in industrial IT, e-business and telecommunications. It has launched a Smart Integrated Distribution Unit for secondary power stations, and reported that deregulation in North America and Europe had fuelled higher demand in its Power Transmission business.
Fortum buys UK consultants
Finland’s Fortum Engineering has acquired the Power & Energy Division (SPE) of Symonds Group of the UK. The move is part of Fortum’s plans to expand its operations in the UK.
Terms of the deal have not been disclosed. SPE is a leading consultancy firm in the field of combined heat and power (CHP) and power generation in the UK.
“Our expansion strategy in the UK is mainly focused on engineering and construction of CHP plants using gas and biofuels,” said Pekka Riala, vice president business development in Fortum Engineering. “The purchase of SPE increases our resources and substantially strengthens our local market knowledge.”
Schlumberger moves in on Digital Utility products
Schlumberger has announced that its Resource Management Services group has reached an agreement to acquire a majority holding in Convergent Group Corporation, a digital business solutions company. The outstanding stock of the company will be held by Convergent employees and Cinergy Ventures LLC.
Schlumberger will purchase 71.7 per cent of Convergent’s shares for $8 per share in cash.
The deal gives Schlumberger access to Convergent’s suite of solutions based on emerging technologies and proprietary models. These are designed to help utilities transform into digital business enterprises. Convergent said the move would help the firm capture greater market share for its products, such as Digital Utility.
“This merger represents a fusion between energy delivery and revenue automation, thus offering first-of-a kind capabilities to significantly extend the value of a digital enterprise,” said Convergent CEO Glenn E. Montgomery.
Digital Utility will be partly integrated with Schlumberger Resource Management Services, expanding its capabilities to include revenue management, load data management and fixed network optimization.
Engineering firms join forces
International engineering companies Harza Engineering and Montgomery Watson have signed a memorandum of understanding to merge. The deal would create one of the world’s largest engineering and construction consulting organizations with expertise in water, wastewater, energy and infrastructure.
The new entity will be called Montgomery Watson Harza. It will employ over 5000 people in 30 countries, and will have annual revenues of $680m. The company will have offices in Denver, Chicago, London and Singapore.