General Electric Company (NYSE:GE)

[orangetea]

France secures Alstom stake option ahead of GE tie-up
Sun Jun 22, 2014 10:48pm BST

By Benjamin Mallet and Laurence Frost

PARIS (Reuters) - France won an option to buy 20 percent of Alstom (ALSO.PA) from construction group Bouygues on Sunday, in an eleventh-hour deal clearing the way for the agreed sale of Alstom's energy business to General Electric (GE.N).

The government had backed the tie-up on condition that it first secured the Alstom stake from Paris-based Bouygues (BOUY.PA) - leaving less than three days to negotiate an agreement before GE's formal offer expires on Monday.

Ministers are determined to maintain influence over a complex deal that parks some Alstom assets deemed strategically important to France within GE-controlled joint ventures.

"This is a way of organising ourselves in the face of globalisation," Economy Minister Arnaud Montebourg told France 2 television after announcing the option agreement.

"It builds alliances rather than allowing France to become a giant shopping centre for foreign corporations to come and prey on our companies," he said.

GE and rival bidder Siemens (SIEGn.DE) - later joined by Mitsubishi Heavy Industries (7011.T) - had both revised their offers as France sought guarantees on jobs and sensitive activities.

The U.S. group's 7.3 billion euro (5.82 billion pounds) cash outlay brings Alstom shareholders a smaller windfall than envisaged at first, with a narrower perimeter of activities sold outright.

Despite the concessions, granted in response to French concerns, the revised plan "remains accretive in year one", GE chief Immelt said on Saturday.

Alstom said the same day its board had unanimously approved the deal, which values the business at 12.35 billion euros.

Under its terms, GE is to buy most Alstom energy assets including gas and steam turbines for power plants, while selling its own rail signalling division for $800 million to reinforce Alstom's transport offering, which includes TGV trains.

The tie-up also establishes ventures in France to house Alstom's power grid and renewable energy businesses, while sensitive nuclear turbines are placed under government control.

In an interview with France's Journal du Dimanche, Alstom chief Patrick Kron said he would bow out in favour of a new management team after an unspecified transition period.

The deal with GE draws a line under a two-month battle for Alstom that had become heavily politicised as soon as the first reports of a tie-up plan appeared in April.

Luc Chatel, the centre-right party's acting head, described the accord negotiated by Montebourg as a "lose-lose deal" on Sunday and questioned the use of public funds.

"There was an (earlier) offer on the table that would have avoided a public investment," Chatel said.

The option deal with Bouygues ends a stand-off that followed Montebourg's surprise declaration on Friday that the government would pay only "market price" for its Alstom stock. The shares closed at 28 euros the same day.

Raising the pressure in a weekend newspaper interview, Montebourg said that "gifts to (CEO) Marin Bouygues are out of the question".

But Bouygues balked at the strong-arm tactics, sources close to the talks said, holding out for a price closer to 34 euros - a premium of 380 million euros or 21 percent over the holding's 1.73 billion market capitalisation

Under the compromise, Bouygues will lend Alstom stock commanding 20 percent of voting rights to the French government and surrender its two board seats, allowing the state to exercise an immediate role as the group's main shareholder.

For 20 months, the government will then have an option to purchase up to 20 percent of Alstom from Bouygues - which currently holds 29.3 percent - with a 2-5 percent discount, at any point when the market price is 35 euros or more.

If the government has not acquired 20 percent of Alstom by the end of that period, either from Bouygues or the market, it can purchase up to 15 percent from Bouygues with a similar mark-down, whatever the quoted share price.

The loan of Alstom stock will be free of charge to the government, a Bouygues spokesman said, declining to comment on financial terms for the accompanying purchase option.

Subject to regulatory and shareholder approval, the GE-Alstom deal is scheduled to close in early 2015.

[CityFarmer]

IMO, activist investors are not always a good thing for companies. Activist investors are more motivated by short-term gains, rather than long-term prospect of the company...

That makes Mr. Buffett, a preferred investor, over those activists...

Nelson Peltz's Trian takes $2.5 billion stake in General Electric

Activist investor Nelson Peltz's fund has bought a $2.5 billion stake in General Electric Co, adding fresh pressure on the U.S. conglomerate to pull off its plan to shift away from finance operations toward its industrial roots.

Shares of Dow industrials component GE rose 4.5 percent to $26.60 on Monday after Peltz's Trian Fund Management disclosed its roughly 1-percent stake, and said the stock could be worth $40 to $45 per share by the end of 2017.

Trian, which said its biggest-ever investment also makes it a top-10 GE shareholder, said it wanted GE to cut costs to expand operating margins, explore more share buybacks including by taking on new debt, be disciplined in its acquisitions and consider ways to further scale back GE Capital.

But Trian said it would not seek a board seat, backing the "transformation" already under way at GE. Peltz said Chief Executive Jeff Immelt and GE "share much common ground with Trian."

Immelt, in a statement, welcomed Trian's investment.
...
http://www.todayonline.com/business/nels...ake-ge-wsj

[greengiraffe]

Digital future: GE unlocks value in industrial internet

• THE AUSTRALIAN
  
• OCTOBER 24, 2015 12:00AM
  

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Richard Gluyas
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Melbourne

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The global trend Australia can't afford to miss

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GE chairman and CEO Jeff Immelt is ‘absolutely sure’ of the value of industrial internet.Source: News Corp Australia
[b]At GE’s first Minds + Machines conference in 2012, chairman and chief executive Jeff Immelt and his team were preparing for the worst — that customers, investors or anyone else of great importance would see the whole idea of this ­industrial internet thing as a ­furphy.[/b]
So, you’re planning to do what with the web?
“If I go back to 2010, all we were saying was: ‘Let’s screw around with some analytics and see what happens’,” Immelt says, laughing at the memory. “Two years later at Minds + Machines, we were kind of waiting to see if anyone said: ‘Hey, this is bullshit!”
Since then, GE has taken the great leap into the less unknown.
Immelt is now “100 per cent sure” that the productivity enhancing power of the industrial internet is real, so the GE machine is up-ending itself to become a ­digital industrial leviathan. The business and cultural transformation of GE is immense and ongoing, even for a company with a long history of disruptive change since it was co-founded by Thomas Edison in 1878.
From the very top of GE right down to its nether regions, a fundamental change in thinking is required. Immelt, for example, concedes he had to deliberate long and hard before agreeing to open up GE’s Predix operating platform to external app developers, mainly because he was schooled in the old industrial world where the systems were closed and supported a perceived competitive advantage.
“But the people running this for us came from Microsoft and Cisco,” he says. “They slap me in the face and say: ‘If you ever want to be relevant in this world you have to have an open system’.”
Immelt also thought deeply about whether to build the necessary talent base organically, or do it in one hit with an acquisition. While there’s still scepticism about the organic route he chose, the GE chief says he’s been able to lure software and IT professionals who would previously have never ­regarded a stint at the stodgy industrial company as a viable career option.
To achieve this, GE’s leaders had to roll their sleeves up and get involved, convincing people that the mission of revolutionising industrial companies was a worthy one and achievable.
“It’s critical to bring people in from outside our company and our culture,” he says. “Then you have to make sure that everyone is thoroughly afraid, and that if we don’t do it we’re going to get killed.
“There’s a healthy paranoia inside GE which says: ‘If we don’t do it someone else will’.”
Since taking over from his legendary predecessor Jack Welch only a few days after the September 11, 2001 terrorist attacks on the US, Immelt has wrought a degree of change inside GE that’s often overlooked or disregarded.
With the soon-to-be-completed divestment of most of its financial services business, Immelt will have sold about 65 per cent of the assets he inherited from Welch, exiting television and the appliance operations, among other things.
Further, 70 per cent of GE will be offshore, instead of 70 per cent inside the US under Welch.
It’s indicative of the importance of the industrial internet to GE that Immelt feels it’s the most important project in his decade-and-a-half as CEO.
The scale of the opportunity is clearly important to him, and one of the reasons he’s decided to take it on. As recently as 2004, GE was the most valuable company on the planet, with investors prepared to pay an extraordinary premium for the personality cult of Jack.
Under Welch, GE traded at a monstrous multiple of 50-60 times earnings, with half the company’s earnings coming from a finance business.
The collapse of Lehman Brothers in 2008 permanently erased the pre-crisis halo of non-banks, leading to GE significantly underperforming the market over two business cycles.
Immelt, however, is developing a spring in his step, with GE stock up about 20 per cent since the start of the year compared to a flat industrials sector.
Not surprisingly, he sees the recent emergence of activist shareholder Nelson Peltz, who shelled out $US2.5bn for a 1 per cent stake in the group, as validation of GE’s industrial internet strategy.
Peltz’s Trian Fund Management has never made a bigger investment, and it now ranks as a top-10 GE shareholder.
“We like long-only investors who know the company; he underwrote GE for what we are,” Immelt says.
“I’m absolutely certain now that there’s going to be immense value created out of the industrial internet in the next five-10 years.
“But now the focus is back on us, which means I have a different fear. “A few years ago I was spending all this money thinking: ‘Is this a good idea?
“The challenge now is: ‘How do we win?’”

[CityFarmer]

M&A from China companies, is picking up...

China’s Haier to buy GE’s appliance unit for US$5.4 billion

HONG KONG (Jan 15): China’s Haier Group agreed to buy General Electric Co.’s appliance business for US$5.4 billion ($7.8 billion) in what would be the country’s biggest acquisition of an overseas electronics company.

The group’s Qingdao Haier Co. signed an agreement with GE, according to a statement. The transaction is targeted to close in mid-2016, it said.

Buying a century-old business that makes US$8,500 refrigerators from the likes of GE would underscore the rise of a Chinese company once known for making cheap fridges for college dormitories.

It also highlights Haier’s global ambitions as the acquisition would help the company expand in the US, one the markets it’s trying to focus on besides Europe and Japan.
http://www.theedgemarkets.com/sg/article...54-billion

[cyclone]

GE Plunges the Most in Six Years

Thomas Black and Brendan Case
October 24, 2017, 4:08 AM GMT+8 October 24, 2017, 5:07 AM GMT+8

General Electric Co. tumbled the most in six years after the company’s deteriorating outlook stoked fears it will cut its dividend for only the second time since the Great Depression.

Banks from RBC Capital Markets to UBS Group AG lowered their predictions for GE’s stock price, days after Chief Executive Officer John Flannery slashed the manufacturer’s 2017 profit forecast. Morgan Stanley recommended selling the shares, citing “a higher probability of a dividend cut that we do not view as priced in” and hurdles in GE’s power-equipment unit.

“The weakness in the power business is one item that people are getting more bearish on,” Jeff Windau, an analyst at Edward Jones, said in an interview. “The dividend is another one of those items in which people are getting a stronger feeling that it’s going to be cut.”

More details in https://www.bloomberg.com/news/articles/...d-in-peril

[cyclone]

Shrinking GE rattles investors, shares hit 5-year low

Alwyn Scott, Ankit Ajmera
NOVEMBER 13, 2017 / 1:47 PM

(Reuters) - General Electric Co’s (GE.N) new Chief Executive John Flannery on Monday outlined steps that will turn the biggest U.S. industrial conglomerate into a smaller, more focused company, surprising some investors who sold the company’s shares to a five-year low.

Flannery’s plan to shrink GE’s multi-industry array of businesses was a reversal of the deal-driven empire building of his predecessors, Jeff Immelt and Jack Welch, and potentially a milestone in the decline of the conglomerate as a business strategy.

Other companies that once emulated the GE model of spreading bets among diverse industries are now unwinding their portfolios as well, something Immelt also did throughout his 16 years as CEO, even as he made acquisitions.

More details in https://www.reuters.com/article/us-ge-re...SKBN1DD0H3

[weijian]

How GE Went From American Icon to Astonishing Mess

If all goes well, GE will become a more mundane brand. It will be less about spreading the gospel of innovation, managerial excellence, or digital disruption and more about making really good jet engines, gas turbines, and medical equipment, selling as many units as possible, and upselling clients on software and maintenance plans. Perhaps it will be liberating. Being an icon isn’t worth what it once was.

https://www.bloomberg.com/news/features/...shing-mess

[yeokiwi]

How GE Went From American Icon to Astonishing Mess

If all goes well, GE will become a more mundane brand. It will be less about spreading the gospel of innovation, managerial excellence, or digital disruption and more about making really good jet engines, gas turbines, and medical equipment, selling as many units as possible, and upselling clients on software and maintenance plans. Perhaps it will be liberating. Being an icon isn’t worth what it once was.

https://www.bloomberg.com/news/features/...shing-mess

There are so many management courses, seminars and talks that are based fully or partially on GE's management principles especially Jack Welch's. The trainers probably will have to rewrite many of those and re-package them to "psycho" the trainees.

But, GE is still a remarkable company. It has survived two world wars and countless number of financial crises.

[weijian]

There are so many management courses, seminars and talks that are based fully or partially on GE's management principles especially Jack Welch's. The trainers probably will have to rewrite many of those and re-package them to "psycho" the trainees.

But, GE is still a remarkable company. It has survived two world wars and countless number of financial crises.

i am pretty sure new training syllabuses (revised versions) have already been completed, or under way - written in flavors like "The Alibaba way" or "The Amazonian method" etc. You could even sell it to previous graduates again to remind them the need to continue to upgrade.

GE's current attempts at turnaround, reminds me a little of a few years back with HP, which split into 2 companies (the printers and enterprise). GE's customers' habits haven't changed much - it was themselves who became more complicated. So i reckon by focusing on its core strengths and markets, the odds of a successful turn around are generally higher.

[specuvestor]

I too think businesses in GE has a lot of inherent moat. The problem is the structure which can be financially engineered ie restructured, capital allocation, etc