Less than a week after GE struck a $2.6 billion deal with ABB for GE’s electrification business, GE Power completed the $3.4 billion sale of its lucrative water and process technologies division to multinational water management firm SUEZ.
The sale of GE Water & Process Technologies, a systems and services provider of water, wastewater and process systems solutions, was completed on September 30 but announced on October 2. According to GE and SUEZ, the division manned by 7,500 employees generated about $2.1 billion in revenues for GE in 2016. Today’s announcement, on the heels of last week’s GE-ABB deal, is part of the company’s transition under new CEO John Flannery.
According to Russell Stokes, who replaced Steve Bolze as president and CEO of GE Power in July, the sale of GE Water & Process Technologies is the “next step in GE Power’s business strategy and portfolio transformation.”
Bolze, whose final day at GE was September 30, announced his retirement from GE this June after he lost out to Flannery as successor to CEO Jeff Immelt. In June, GE also moved to combine its power and energy distribution businesses to create a single power-focused unit called GE Power. Under Bolze, GE launched the HA gas turbine, acquired and integrated giant global equipment firm Alstom, and transformed the firm’s products and services with digital capability.
Stokes, who had led GE Energy Connections and GE Transportation in previous roles, said in a press release on October 2 that GE Power’s plans to sell its water and process division were cemented a year ago, in part due to the overlap of product lines with Baker Hughes, which merged with GE this July.
SUEZ, a company with 90,000 employees across the entire water and waste value chain, will now integrate the unit as its newly formed “Water Technologies & Solutions” division, which will be headed by Heiner Markhoff, a former president and CEO of GE Water. “This new [business unit] combines both the acquired business and [SUEZ’s] own industrial service activities. It will offer an unparalleled value proposition to the shareholders, including the expected commercial, operational and technical synergies,” the company said in a statement.
At GE, meanwhile, more divestment may be coming, according to CEO Flannery. Multiple sources have reported that Flannery may meet with shareholders in November to discuss a cost-cutting vision for the company. The New York Times reported last week that activist hedge fund Trian Fund Management and its lead investor, Nelson Peltz, are pressuring GE to cut costs.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)