Thomson Reuters
- General Electric is selling off its power generation business to a private equity firm for $3.25 billion.
- The move is a continuation of new CEO John Flannery's plan to downsize the industrial giant's footprint and return it to its former glory.
- Shares of GE fell about 1.5% in trading Monday, and are down 28% since the beginning of 2018.
- GE will be replaced by Walgreens Boots Alliance in the Dow Jones industrial average on Tuesday.
- Follow GE's stock price in real-time here.
General Electric, which will leave the Dow Jones industrial average on Tuesday, will sell off its distributed power business as part of its ongoing restructuring plan, the company announced Monday.
Advent International, a $41 billion Boston-based private equity firm, will acquire the power generation unit for $3.25 billion. Cummins, which makes diesel engines for trucks and power generators, was also interested in bidding for the unit, according to the Wall Street Journal.
"GE Power will continue to invest in developing the energy technologies of the future and improving the power networks we depend on today," Russell Stokes, CEO of GE Power, said in a press release. "This transaction not only accelerates our reinvestment in our business, but also enables Distributed Power to be best positioned to pursue its growth strategy."
Under its new CEO John Flannery, who took over in August 2017, GE has sold off other business units - including locomotive and power-plant manufacturing businesses - as it struggles to regain its past prowess and boost its stock price to its previous levels. The stock has fallen nearly 80% from its highs in 2000.
Monday is GE's last trading day on the Dow Jones industrial average. The original Dow component will be replaced on Tuesday by Walgreens Boots Alliance to make it "more representative of the consumer and health care sectors of the US economy," S&P Dow Jones Indices, which manages the index, said.
"We are focused on executing against the plan we've laid out to improve GE's performance," the company said in a statement when the index shakeup was announced last week. "Today's announcement does nothing to change those commitments or our focus in creating in a stronger, simpler GE."
Shares of GE fell about 1.5% in trading Monday, and are down 28% since the beginning of 2018.
