November 2, 2015 / 12:46 PM / 4 years ago

Alstom closes sale of energy business to GE

PARIS (Reuters) - Alstom (ALSO.PA) said it had completed the 12.35 billion euro ($13.6 billion) sale of its energy business to General Electric Co (GE.N), helping the French group refocus on its transport business.

The logo of Alstom is pictured on a building during an inaugural visit of the Alstom offshore wind turbine plants in Montoir-de-Bretagne, near Saint-Nazaire, western France, December 2, 2014. REUTERS/Stephane Mahe

GE said the final purchase price was 9.7 billion euros, adjusted for proceeds Alstom is reinvesting in joint ventures with the company and changes in the deal structure, among other things.

Alstom, which was aiming to complete the sale in the fourth quarter, said on Monday it planned to return between 3.2 and 3.7 billion euros of the sale proceeds to shareholders.

GE said Alstom’s energy business was combined with its power and water unit, and was renamed as GE Power.

Headquartered in Schenectady, New York, the business will be led by Steve Bolze, chief executive of the power and water unit.

GE Power would have an estimated annual revenue of about $30 billion, and employ more than 65,000 globally, GE said.

The industrial conglomerate’s power and water unit, which makes heavy-duty gas turbines and machines for utilities and independent power producers, had revenue of $27.56 billion in 2014, with about 38,000 employees.

There have been no final decisions made on any actions that would impact jobs at GE’s Power business as a result of the Alstom integration, GE spokesman Seth Martin said.

The company said it expects the deal to add 5-8 cents to earnings per share in 2016 and 15-20 cents by 2018. The company is targeting $3 billion in cost synergies in the fifth year.

Alstom, which among other transport sector activities builds trains, has scheduled a board meeting for Wednesday to propose the launch of a public share buyback offer.

GE’s shares were up about 1 percent at $29.17 in afternoon trading on the New York Stock Exchange. Alstom shares closed at $29.56 in Paris.

Reporting by Benjamin Mallet in Paris and Ankit Ajmera in Bengaluru; Writing by Brian Love; Editing by James Regan and Maju Samuel

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