General Electric (GE) reached a deal to lop off another chunk of its sprawling business on its last day as a component of the Dow Jones industrial average.
The industrial conglomerate will sell its industrial gas engines unit for $3.25 billion to private equity firm Advent International, which reportedly edged out Cummins (CMI) to land the attractive business worth more than $1 billion in annual revenue.
The distributed power unit, whose sale GE announced Monday, makes Jenbacher and Waukesha engines. The heavy-duty gas turbines generate power and heat for industrial facilities, often located in harsh and remote environments.
GE CEO John Flannery last year revealed plans to shed $20 billion in assets and slash billions in costs. Last month, he took the biggest step so far in his turnaround plan for the troubled conglomerate, merging GE’s century-old railroad business with Wabtec (WAB) in a complex deal worth $11 billion.
The industrial gas engines unit, which posted sales of $1.32 billion in 2017, attracted the interest of various buyout firms besides Cummins, according to reports. Cummins makes engines and generators.
Shares lost 2.3% at 12.75 on the stock market today, as the Dow Jones industrial average sold off amid an escalating Trump trade war. Wabtech fell 2% and Cummins lost 1.3%, hitting a 52-week low. GE’s former Dow peers United Technologies (UTX) and 3M (MMM) lost 0.2% and 0.4%, respectively, on Monday.
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