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GE’s energy unit to buy 90% of Converteam for $3.2bn

Published: 19:33 29 Mar 2011 BST

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GE's (NYSE:GE) energy unit has agreed to pay $3.2 billion in cash for a 90% stake in Converteam, a French provider of power-conversion components.

The deal is GE's latest in a series of acquisitions to expand its energy business.  In February, the company announced it would buy the well support unit of John Wood Group for $2.8 billion, after agreeing to pay $1.3 billion for Wellstream Holdings, a maker of oil exploration equipment, in December.

In 2010, Converteam, based in Massy, France, had sales of $1.5 billion and EBITDA of about $239 million, with 5,300 employees.

Converteam’s current major shareholders include Barclays' private equity unit and the company’s management, which will retain the remaining 10% stake.

GE said it has agreed to buy the 10% holding over the next two to five years and expects to pay no more than $480 million for the slice.

Connecticut-based GE anticipates about $250 million in annual operating synergies from the deal by the fifth year.  In the last six months, the company has made $11 billion worth of acquisitions in the energy sector.

The Converteam transaction, subject to customary conditions, is expected to close during the third quarter.

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