Alstom Exits Joint Ventures with GE

Alstom stated today that it will exercise its options to exit the renewable energy, grid, and nuclear businesses that were created as part of Alstom’s €12.4B energy sale to GE in 2015. The original deal gave GE control of Alstom’s gas-turbine operations. GE is now required to buy Alstom SA’s stakes in the three joint ventures for 2.59 billion euros ($3.1 billion).

The transfer to GE of the assets should occur this fall.

The redemption comes at a time when GE’s resources have already been strained by weak cash-flow and slumping demand. GE said in a regulatory filing in February that it had already been informed of Alstom’s intent to exit the ventures this year.

GE rose less than 1 percent to $14.72 ahead of regular trading in New York. Alstom advanced less than 1 percent to 38.89 euros at 2:50 p.m. in Paris.

Under the terms of the agreement with GE, Alstom said it will follow through with its right to exit the renewable-energy and grid ventures during the “exercise period” between Sept. 4 and Sept. 10. Doing so will trigger GE’s option to buy Alstom’s stake in the nuclear business, according to a statement.

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