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GE Collaborates with Lufthansa for Poland Engine Plant
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Industrial manufacturing behemoth General Electric Company (GE - Free Report) and German airline firm Lufthansa have recently collaborated to invest approximately €250 million ($270 million) in Poland to build a state-of-the-art facility that will service aircraft engines starting in 2018. The strategic move will further augment the regional presence of General Electric, which has over 25 years of existence in the country in the engineering sector.
The new facility will boost the Polish economy through new jobs and support services and is likely to attract similar future investments to improve the infrastructure of the country. The plant will be primarily utilized to test and repair high-tech engines for the Boeing 747-8 jumbo jets for Lufthansa and other airlines from Sep 2018. The facility is scheduled to be in operation for at least 30 years and will likely create about 600 new jobs while training personnel and recruiting local talent.
In addition to opportune acquisitions and technological collaborations, General Electric is pruning its operating portfolio to focus on core manufacturing businesses with a digital edge. Post 3Q earnings, General Electric has outperformed the Diversified Operations industry driven by a string of strategic acquisitions and collaborations with an average return of 7.4% compared with 6.1% of the latter.
On Oct 31, General Electric inked a definitive agreement with Baker Hughes Incorporated to merge its Oil & Gas business with the latter to form an industry leader with an unrivalled mix of service and equipment capabilities. Under the terms of the agreement, GE Oil & Gas and Baker Hughes will form a new entity (the “New” Baker Hughes) using a partnership structure, pursuant to which both the parties will contribute their operating assets to the newly formed partnership. General Electric will own the majority stake of 62.5% in the new company, and the remainder will be held by the erstwhile Baker Hughes shareholders.
With a complimentary portfolio of operating assets and integrated offerings, the new entity will be able to better serve the existing customers of both the companies. The transaction will reportedly create the second largest player in the oilfield equipment and services industry.
The partnership with Baker Hughes portrays re-conglomeration efforts by General Electric to arrest the dwindling sales of its Oil & Gas business. During third-quarter 2016, Oil & Gas revenues declined 25% year over year to $2,964 million, due to macroeconomic headwinds and volatility in oil prices. Experts widely believed that GE Oil & Gas business lacked product breadth and was losing market share in a few key product lines, leading to increased risk of asset erosion. The strategic deal, therefore, fortifies the beleaguered business to ramp up its operations to fend off competition from rivals like Schlumberger Limited (SLB - Free Report) and Halliburton Company (HAL - Free Report) .
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GE Collaborates with Lufthansa for Poland Engine Plant
Industrial manufacturing behemoth General Electric Company (GE - Free Report) and German airline firm Lufthansa have recently collaborated to invest approximately €250 million ($270 million) in Poland to build a state-of-the-art facility that will service aircraft engines starting in 2018. The strategic move will further augment the regional presence of General Electric, which has over 25 years of existence in the country in the engineering sector.
The new facility will boost the Polish economy through new jobs and support services and is likely to attract similar future investments to improve the infrastructure of the country. The plant will be primarily utilized to test and repair high-tech engines for the Boeing 747-8 jumbo jets for Lufthansa and other airlines from Sep 2018. The facility is scheduled to be in operation for at least 30 years and will likely create about 600 new jobs while training personnel and recruiting local talent.
In addition to opportune acquisitions and technological collaborations, General Electric is pruning its operating portfolio to focus on core manufacturing businesses with a digital edge. Post 3Q earnings, General Electric has outperformed the Diversified Operations industry driven by a string of strategic acquisitions and collaborations with an average return of 7.4% compared with 6.1% of the latter.
On Oct 31, General Electric inked a definitive agreement with Baker Hughes Incorporated to merge its Oil & Gas business with the latter to form an industry leader with an unrivalled mix of service and equipment capabilities. Under the terms of the agreement, GE Oil & Gas and Baker Hughes will form a new entity (the “New” Baker Hughes) using a partnership structure, pursuant to which both the parties will contribute their operating assets to the newly formed partnership. General Electric will own the majority stake of 62.5% in the new company, and the remainder will be held by the erstwhile Baker Hughes shareholders.
With a complimentary portfolio of operating assets and integrated offerings, the new entity will be able to better serve the existing customers of both the companies. The transaction will reportedly create the second largest player in the oilfield equipment and services industry.
The partnership with Baker Hughes portrays re-conglomeration efforts by General Electric to arrest the dwindling sales of its Oil & Gas business. During third-quarter 2016, Oil & Gas revenues declined 25% year over year to $2,964 million, due to macroeconomic headwinds and volatility in oil prices. Experts widely believed that GE Oil & Gas business lacked product breadth and was losing market share in a few key product lines, leading to increased risk of asset erosion. The strategic deal, therefore, fortifies the beleaguered business to ramp up its operations to fend off competition from rivals like Schlumberger Limited (SLB - Free Report) and Halliburton Company (HAL - Free Report) .
We remain impressed with the technological collaborations of this Zacks Rank #3 (Hold) stock to improve its revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>