General Electric has agreed to sell its century-old railroad business to Wabtec for around $11B.
According to Axios, GE will receive $2B in cash and a 9.9% stake in the combined company, while shareholders will receive a 40.2% stake.
The Wall Street Journal reports that GE is currently in a major slump, with their stock down nearly 50% in the past year. But their new CEO, John Flannery, has promised a major “revamp” since taking the helm in August, and this is his first move in a major makeover.
Flannery’s comin’ in hot
In October, Flannery said there were “no sacred cows.”
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AKA, he’s going to mercilessly cut business units that aren’t pulling their weight (GE’s freight locomotives division profits dropped 23% in 2017), so that the remaining divisions don’t have to fight for company resources.
He also pledged to sell at least $20B in assets and refocus the Boston-based manufacturer on key markets like aviation, healthcare, and energy.
And there’s gonna be more where that came from
The company is simultaneously in the midst of a strategic review that could result in other units being split or slashed — and lead to a breakup of the conglomerate entirely.
In the meantime, Flannery has promised to update investors by the end of June with a full plan for GE’s key markets, as he aims to make the company a lean, mean, dividend-producing machine.