The much-delayed sale of General Electric’s (GE) industrial gas engines unit is close to being finalized. Divesting the unit, which makes the Jenbacher and Waukesha gas engines, is important as it will help GE streamline the power unit and stay abreast of its competitors in the global power market. Other strategies include cost-cutting and management change. The power unit is, in fact, GE’s largest by revenue, but has been struggling for a long time now.
Over the past decade, GE shrunk itself dramatically. It was the worst Dow component last year, and earlier this year, it was kicked out of the index, replaced by Walgreens Boots Alliance Inc. (WBA). As it embarks on its turnaround plan, the company is close to finalizing the impending sale of its industrial engine unit to a private-equity firm. Reports according to Wall Street Journal state that GE agreed to sell the unit to Advent International. The deal worth for $3.25 billion would help boost the company’s finances.
GE agreed to sell the unit to Advent International. The deal worth for $3.25 billion would help boost the company’s finances.
CEO John Flannery aims to shed assets worth $20 billion by next year. Last month, it sold its struggling rail unit for $11 billion to railroad manufacturing firm Wabtec. Flannery is under immense pressure from the investors to save the sinking business.
Last year in December, the company had revealed its plans to eliminate 12,000 jobs from its power unit, as a part of a strategy to cut $3.5 billion in costs by the end of 2018. The company had also halved its dividend, inviting the ire of its shareholders. The Boston-based company plans to focus on its three core industrial businesses – Aviation, Power, and Healthcare. GE has also given hints to the investors that it may even breakup into separate public companies.