GE Seals $17 Billion Deal for French Energy Firm Alstom

The deal is GE’s largest ever and is expected to be completed in 2015, at roughly the same time that GE completes a split-off of its GE Finance unit into a separate company called Synchrony Financial. The addition of Alstom’s turbine and other manufacturing businesses, along with the casting off of the finance business, is widely viewed as a return to GE’s roots as an industrial giant. Alstom will retain its nuclear and its high-speed train businesses, and it will acquire from GE the U.S. company’s rail-signaling business.

That is a reasonable conclusion, but it looks like only half the story. GE’s focus has been on energy, both conventional hydrocarbon-based and alternatives like wind and solar. Alstom virtually built France’s electrical power grid and the turbines that produce the country’s electricity.

GE and its CEO Jeffrey Immelt want out of the finance business, no doubt as regulation piles up and opportunities narrow. Positioning itself as a supplier of turbines for natural gas-fired power plants, coal-fired plants and wind turbines, GE is able to capture business at both ends of the transition from fossil fuels and to renewables. Immelt is betting that is where the action is going to be for the foreseeable future, and he may turn out to be clairvoyant.

Shares of GE were up about 0.3% in premarket trading Monday, at $27.5 in a 52-week range of $22.76 to $28.09.

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