GE to Buy Converteam in $3.2 Billion Deal
General Electric says it plans to buy a 90 percent stake in French electrical equipment developer Converteam in a deal GE values at $3.2 billion.
Converteam designs high-efficiency systems that reduce energy consumption and greenhouse gas emissions. GE says it plans to use Converteam's expertise to serve high-growth regions in Brazil, Russia, China, India and the Middle East.
The deal, which is expected to close during the third quarter, is the latest of $11 billion in acquisitions by GE . GE also has acquired Dresser Inc., Wellstream , Lineage Power and Well Support in the past six months.
Converteam employs 5,300 people and operates in 80 countries and posted pre-tax earnings of $239 million in 2010.
General Electric plans to slow its pace of dealmaking following its purchase of Converteam, a top executive said.
"As you look forward here, our top priority is going to be making these acquisitions work for GE shareholders, not adding to the heap," said John Krenicki, a vice chairman of the largest U.S. conglomerate, who heads the GE Energy Infrastructure division.
Asked it the company would continue its torrid pace of dealmaking, he said: "Not this pace, no."
The company expects its $3.2 billion acquisition of France's Converteam, which makes electric motors used in energy production and electronics used in the renewable energy sector, to be accretive to earnings in the first year after it closes, Krenicki added in an interview Tuesday. GE expects the deal to close in the third quarter.