General Electric is one of the most iconic companies and manufacturers in the history of the United States. Over the last five years, the company has undergone a significant transition fueled in part by selling its appliance business and moving away from a number of its financial and traditional business units in favor of software, aerospace, medical equipment, and Industry 4.0 technologies. The company also made a strong foray into 3D printing with nearly $1.5 billion in acquisitions last fall.
The latest example of this transition is a deal that GE made today in selling their Industrial Solutions business to Swiss-based ABB for $2.6 billion. Conversations began earlier this year, with a number of companies, including Schneider Electric and as many as ten private equity firms expressing strong interest.
The Industrial Solutions group suite of offerings consists of a wide array of products, including switches, power supplies, motion control components, and power distribution products ranging from circuit breakers and meters to transformers. It’s estimated that GE owns about a 10 percent market share in this sector.
The products and services associated with the acquisition would be highly complementary to ABB’s power distribution and industrial component offerings and would strengthen their position in the U.S. marketplace in a number of other areas, such as industrial power supplies.
In addition to the recent sale of their water treatment business unit, GE is saying goodbye to Jeff Immelt, who served as the company’s CEO for 16 years before stepping down this summer. He’ll continue to serve as Chairman until the end of the year.
Immelt led GE through a difficult transition focused on dropping legacy products and moving aggressively into a more digital focus. Personal opinions on Immelt vary. While he did transition GE and drove earnings improvements, the stock price for the company is currently under half of the value before Immelt took the helm. The move to sell the Industrial Solutions business is seen as another step to help the company separate from legacy business units and free up cash for technology-based acquisitions.