The transportation division of the General Electric Company announced on Monday it would merge with Wabtec Corp. in a transaction valued at roughly $11 billion.
Current Wabtec chief executive officer Raymond Betler will serve as CEO of the combined entity. Rafael Santana, CEO of GE Transportation, will serve as CEO of Wabtec’s freight business.
The two companies touted the benefit the merger would provide to shareholders and said it would allow the combined business to “meet the industry’s rapidly growing demand for rail performance, with the potential to unlock billions in annual savings across freight rail for customers and operators.”
The merger was approved by the board of directors of both GE and Wabtec. Boston-based GE will own a 50.1 percent stake in the combined entity and will nominate three independent board members. Wabtec’s headquarters will remain in Wilmerding, Pa.
The sale is the first major move by GE’s John Flannery to sell off under-performing aspects of the business since coming onboard as CEO last year. The companies expect the transaction to close in early 2019.
