GE Offers a Blueprint for Its Great Unwind
A transportation merger is the first big step in CEO John Flannery's rethink of the company, but the devil is in the details.
Expect more deals like this.
Photographer: Prashanth Vishwanathan/Bloomberg
The GE of the future won't look anything like the GE of the past.
The embattled industrial conglomerate on Monday announced a merger between its locomotive unit and Wabtec Corp. The deal is as complicated as it gets, with General Electric Co. first selling some of its transportation assets to Wabtec, then spinning or splitting off a portion of the business to its own shareholders and merging that piece with a subsidiary of Wabtec. The various machinations are meant to keep the deal tax-free to investors, and the net gist is that GE will receive $2.9 billion in cash and, together with its shareholders, own 50.1 percent of the combined company.