General Electric (GE) has announced that it has completed the spinoff and merger of its transportation business with Wabtec Corporation, the CFTS portal reports.

As a result of the transaction, Wabtec shareholders own approximately 50.8% of Wabtec on a fully diluted basis and GE shareholders own approximately 24.3% of Wabtec on a fully diluted basis. GE owns common stock and non-voting convertible preferred stock, which together represent approximately a 24.9% economic interest in Wabtec on a fully diluted basis. GE also received approximately USD 2.9 billion in cash at closing.

The combined company, which is expected to have revenues of more than USD 8 billion in 2019, has approximately 27,000 employees in 50 countries.

"This transaction is good for GE shareholders, who gain equity in an organization at the forefront of rail innovation; for GE, as we work to reduce leverage and strengthen our balance sheet; and for Wabtec, which now has a stronger and more diversified business mix to serve its customers,” said GE Chairman and CEO H. Lawrence Culp Jr. “The GE and Wabtec teams worked hard to complete this deal, and I am excited by the opportunities ahead for Wabtec.”

Raymond T. Betler, Wabtec’s president and CEO, said the deal was “a once-in-a-lifetime opportunity to bring together nearly four centuries of collective experience to create a technologically advanced leader with a highly complementary set of capabilities to move and improve the world."

Wabtec is a global provider of equipment and systems services for transit and freight rail. Through its subsidiaries, the company manufactures a range of products for locomotives, freight cars and passenger transit vehicles. The company also builds new switchers — locomotives used to move cars around in railyards — and commuter locomotives. It also provides aftermarket services.

GE Capital’s CEO John Flannery announced in 2017 that the company intended to sell USD 20 billion in assets. Among other things, Flannery announced that GE would sell the bulk of its transportation business to Wabtec for USD 11.1 billion. GE will now focus on development of its four remaining businesses - GE renewable energy, GE power, GE aviation, and GE Capital.

As the CFTS portal reported earlier, the merger decision was the result of a combination of factors, and it is intended to give a new impetus to the development of the relevant division of the American company.