The U.S. Department of Justice has closed its review of the pending merger of Wabtec and GE Transportation, a business unit of GE.
The transaction is expected to close by the end of the first quarter of 2019, subject to satisfaction or waiver of customary closing conditions. Once the transaction is completed, the combined company is expected to have significantly expanded margins, a highly attractive profile based on an improved business.
“By bringing together GE Transportation (…) with Wabtec’s broad range of freight, transit and electronics solutions, we will have the capability and expertise to invent smarter ways to move and improve the world,” Raymond T. Betler, president and CEO of Wabtec said.
In May 2018, Wabtec entered into a definitive agreement to combine with GE Transportation. Under the agreement, GE will receive USD 2.9 billion in cash at closing and GE and its shareholders will receive a 50.1% ownership interest in the combined company, with Wabtec shareholders retaining 49.9% of the combined company.
Both companies are expected to benefit from the cyclical tailwinds they are experiencing as industry conditions improve. The backlog of USD 18 billion includes about 1,800 new locomotives and approximately 1,000 to be modernized.
The transaction is valued at USD 11.1 billion and when adjusted for the net tax benefit of
USD 1.1 billion accruing to the combined company, the transaction value is USD 10 billion.
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