The transaction, subject to approvals, is scheduled to close in 2015.
GE will acquire the thermal power, renewable energy and grid businesses of Alstom for $13.5bn (€9.9bn) enterprise value and $3.4bn (€2.5bn) of net cash, totaling $16.9bn (€12.35bn).
Joint ventures will be established in grid and renewable sectors with the two companies holding equal stake. Grid JV will be a combination of Alstom Grid and GE Digital Energy, while Alstom’s offshore wind and hydro businesses will be merged for the renewables venture.
GE, in turn, will sell its entire signalling business to Alstom and sign multiple collaboration agreements for GE locomotives outside of the US, R&D, sourcing and manufacturing and commercial support in the US.
Alstom president and CEO Patrick Kron said, "The combination of the very complementary Energy businesses of Alstom and GE would create a stronger entity, best placed to serve customers globally and invest in people and technology over the long run.
"Alstom Transport, a solid leader with a large portfolio of technologies and a worldwide presence in a dynamic market, would be further strengthened through the acquisition of GE’s signaling business as well as a far-reaching rail alliance with GE."
The company plans to use the sale proceeds in strengthening its transport business.
