General Electric agreed to sell its water unit in a $3.4 billion deal, putting the industrial giant a step closer to the planned merger of its oil division with Baker Hughes.
The all-cash sale to French utility Suez and a Canadian pension fund manager comes about four months after GE put the water unit on the market amid concerns of regulatory pushback against the Baker Hughes combination. Boston-based GE is overhauling its portfolio to focus on industries such as energy and aviation while tilting away from finance and consumer operations.
“We had an overlap in our water business,” Steve Bolze, chief executive officer of GE Power, told Bloomberg Wednesday in an interview at an investor meeting in New York. The deal with Suez “works for the water business, it works for Power and it works for GE’s capital allocation.”
Suez said it will gain broader access to industrial clients and build its international presence, notably in the US and emerging markets. The utility’s growth has been undermined by low inflation and sluggish industrial demand for its services in Europe. The transaction will help grow earnings per share and cash flow within the first year, it said.
Full Content: New York Times
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