Wrapping up a busy year, General Electric Company GE inked an agreement to acquire privately held Metem Corporation. The takeover should give a boost to its competitiveness in heavy-duty gas turbine engines.
Financial details of the deal, which is expected to close in the first quarter of 2016, were kept under wraps.
Metem provides precision cooling hole manufacturing technologies that help turbine engines to function more efficiently. This results in cost savings, increased operation time and reduced emissions. The deal will thus allow GE to realize cost synergies and unlock supply chain efficiencies.
The two companies have had a strong relationship since the 1970s, with GE being Metem’s largest customer today.
The Metem deal will help GE as the industrial conglomerate looks to cut costs by $1 billion annually from its supply chain. GE’s strategy includes buying companies that make parts used in its manufacturing processes.
Last month, GE completed the acquisition of France-based Alstom SA’s gas turbine business, expanding its power capabilities with what was its largest acquisition ever. The Metem deal will support GE in reducing the overall cost base of products made by its power unit.
GE is currently undergoing major, multi-year strategic restructuring in an attempt to return its focus to heavy industrial manufacturing and shrink its presence in financial services operations.
GE presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks that are worth a look now include Leidos Holdings, Inc LDOS, sporting a Zacks Rank #1 (Strong Buy), along with Huntington Ingalls Industries, Inc. HII and General Dynamics Corporation GD, both carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment