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ALSTOM sells its heavy duty gas turbine business to General Electric

23/03/1999

ALSTOM and General Electric (GE) today signed an agreement transferring 100% ownership of ALSTOM's heavy duty gas turbine business to GE, whilst ALSTOM retains 100% ownership of its industrial gas turbine business.

In 1989, EGT NV was established, owned 90% by ALSTOM and 10% by GE. This holding company regroups three companies, two of which are dedicated to the manufacture of heavy duty gas turbines under a licence from GE (AGT SA in France and AGT GmbH in Germany), and the third which is specialised in industrial gas turbines using ALSTOM technology (AGT Ltd in the UK).

According to the terms of the operation, EGT NV will sell to GE the heavy duty gas turbine business (AGT SA and AGT GmbH, including their activities in Argentina and Singapore), whilst ALSTOM will acquire GE's stake in EGT NV. The net consideration of both transactions will be US$910 million.

The heavy duty gas turbine business concerned by this operation has estimated sales of 750 million euros in 1998/99 and employs approximately 2,500 people. The industrial gas turbine business, which will become a 100%-owned ALSTOM company, has estimated sales of 380 million euros.

With this transaction, all the current technology agreements in the area of heavy duty gas turbines will be discontinued, and ALSTOM will now be able to pursue an independent strategy.

This agreement is the subject of appropriate procedures with employee representative bodies and is subject to approval from the relevant regulatory authorities.

Pierre Bilger, ALSTOM's Chairman and CEO, welcomed the transaction: 'This is a satisfactory conclusion to our licence agreement to the benefit of our clients and shareholders.'