Alstom ‘entirely refocused on rail’ as GE deal completed
INTERNATIONAL: Alstom announced the close of the €12·4bn sale of its Energy activities to GE on November 2, saying the group was now ‘entirely refocused on rail transport’. Completion of the transaction followed regulatory approval in more than 20 countries as well as the European Union.
Alstom has used part of the proceeds to acquire GE Signalling for €700m, in a deal which covers 1 200 employees. This will strengthen Alstom’s presence in freight railway signalling and the North American market. However, it does not include the digital traffic control and train management systems which remain part of GE Transportation’s Rail Connect 360 portfolio.
‘Today represents a major milestone in Alstom's history’, said Alstom Chairman & CEO Patrick Kron. ‘We managed to secure a win-win deal with General Electric, which protects the interests of employees and customers in the Energy businesses, while reinforcing Alstom's positioning in the transport industry. Alstom today holds leadership positions on a globally growing rail market and will rely on a solid financial base to support its growth strategy. This company, entirely refocused on transport, also benefits from a skilled management team led by Henri Poupart-Lafarge and I am confident in its ability to drive the Group towards future successes.’
GE said its purchase of Alstom’s Power generation and Grid business was its ‘largest-ever industrial acquisition’. Alstom is to reinvest €2·4bn in three energy joint ventures with GE covering grid, renewable and French steam & nuclear.
Alstom is to return between €3·2bn and €3·7bn to shareholders, with the board scheduled to meet on November 4 to propose a public share buy-back offer followed by a capital reduction through the cancellation of shares. This would be subject to shareholder approval, which is expected by the end of the year. Alstom said that after the full completion of the transaction, it would ‘be deleveraged and rely on a strong balance sheet.’