GE To Acquire France's Converteam For $3.2 Billion

BOSTON (By Scott Malone) - General Electric Co reached a $3.2 billion agreement to acquire a maker of automation systems used in the oil and gas sector, marking the latest in a series of deals in the energy industry.

The largest U.S. conglomerate said its acquisition of Massy, France-based Converteam would boost its offering of high-efficiency electric devices used across the energy industry.

"This acquisition pretty much touches every aspect of our energy portfolio," said John Krenicki, a GE vice chairman who heads the company's Energy Infrastructure unit.

Converteam's products, electric motors that can replace gas-fired engines in oil and gas production, also give GE a chance to build its presence in supplying equipment to the mining and metal-producing sectors, Krenicki said.

"There's no reason that we could not have a GE Mining or GE Metals unit similar to what we have with GE Oil & Gas," he said in an interview.

With this deal, GE has reached $11 billion in takeovers over the past six months in the energy industry alone, reflecting an effort by Chief Executive Officer Jeff Immelt to move the company away from its former dependence on financial services and back toward its industrial core.

But the energy unit will not keep up that aggressive pace of acquisitions, Krenicki added.

"As you look forward here, our top priority is going to be making these acquisitions work for GE shareholders, not adding to the heap," he said. Asked if the company would continue its torrid pace of dealmaking, he said: "Not this pace, no."

GE said it would buy about 90 percent of Converteam from a group of shareholders that include Barclays Private Equity and LBO France. Converteam's existing management will retain a 10 percent stake in the company.

Fairfield, Connecticut-based GE has the right to buy the remaining 10 percent stake over the next two to five years for no more than $480 million, GE said.

Converteam in 2010 generated $1.5 billion in sales, and earnings before interest, taxes, depreciation and amortization were $239 million. It employs 5,300 people.

GE's shares were down 3 cents at $19.72 in trading before the market opened.

(Reporting by Scott Malone; Editing by Lisa Von Ahn and Maureen Bavdek)

Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[DixieMelody]

11:33 PM on 03/30/2011

According to The New York Times, last year General Electric (GE) made over $14.2 billion in profit, but paid NO federal tax.1 None.

Tthanks to the millions GE spent lobbying Congress, we American taxpayers actually owed GE $3.2 billion in tax credits.

Now GE is slashing health benefits and retirement benefits for new employees among non-union workers and is expected to push unions to accept similar cutbacks3, while CEO, Jeff Immelt, gets a 100% pay raise.

What's worse?

Immelt now sits as chair of the President'­s Council on Jobs and Competitiv­eness (Jobs Council), representi­ng corporate America to the President on matters like job creation and corporate taxation.

Sign the petition calling for GE CEO Jeff Immelt to step down as chair of the President'­s Jobs Council.

http://pol.moveon.org/immelt_must_go/?r_by=26714-10310057-bygj0Tx&rc=confemail

[bksrmgk]

02:15 PM on 03/29/2011

And they bought it with the money they saved by not paying US taxes and not creating any jobs here. Think I'll look for the list of all GE subsidiary companies and add them to my do-not-buy-from list.

[LastAngryWoman]

11:51 AM on 03/29/2011

Wow. See what you can buy if you don't have to pay any taxes?
This move is going to create jobs here, too, amirite?
Isn't that the deal? If GE doesn't have to pay onerous taxes...they will create more jobs. Isn't that how it goes? So with their profits...they bought this. And now we'll see jobs. Amirite?

[bereasonable0]

01:17 PM on 03/29/2011

Yes, they will give US workers jobs planting tulips.

[FoxIslander]

04:19 PM on 04/18/2011

Not one word about the french employees that they now own. gonna keep them, or outsource to Asia?