Just a month after spinning off its transportation business, GE (GE) is nearing a deal to sell off a unit that makes industrial engines.
After missing earnings, restating past earnings, and falling out of the Dow, the long-beleaguered giant is in need of a cash injection. Enter Advent International, a private equity firm willing to buy the industrial engines unit for $3 billion or more, according to The Wall Street Journal. A deal could be announced as early as Monday.
This deal is no accident: GE’s CEO John Flannery plans to sell off $20 billion worth of assets by the end of next year, and hasn’t ruled out the possibility of breaking up the entire business. His mandate as CEO is to cut costs and help the company’s suffering stock price recover, and he’s taking no prisoners on his way to doing just that.
This year has already seen several sell-offs from GE, including the sale of a portion of its health business to Veritas Capital for $1.05 billion. In May, GE merged its transportation business with Wabtec, an American manufacturer of train equipment, in a deal worth more than $11 billion, with a $2.9 billion cash payment up front.
The assets being sold to Advent are known as GE’s distributed-power business, composed of two acquisitions under former CEO Jeff Immelt in 2003 and 2010. Immelt left the company last summer under investor pressure. GE’s stock price rose upon his departure.