GE boosts renewable-energy unit with $1.65B wind deal

NEW YORK – General Electric Co. plans to buy a maker of wind-turbine blades for $1.65 billion, bolstering the renewable-energy business that has become a central focus for the industrial giant.

The deal for Denmark-based LM Wind Power will enhance GE’s ability to serve customers in the onshore and offshore wind markets, the companies said Tuesday in a statement. GE plans to operate LM Wind Power, which is owned by private-equity firm Doughty Hanson, as a standalone business within the renewable-energy unit.

“It shows GE’s true commitment to the wind industry,” Jerome Pecresse, CEO of GE Renewable Energy, said in a telephone interview.

The deal marks the latest in a string of acquisitions for the Boston-based company and accelerates growth in its wind power business. GE established the standalone renewables unit after closing the $10 billion acquisition of Alstom SA’s power operations last year.

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GE is rushing to meet global demand for clean energy sources as falling costs make renewable power more competitive with fossil fuels. The company, which also has a sizable hydropower business, is one of the world’s leading manufacturers of onshore wind turbines and is trying to build out a complementary offshore operation. GE is supplying equipment this year for the Block Island project in Rhode Island, the first offshore wind farm in the U.S.

“GE is clearly willing to grow in offshore,” Pecresse said.

GE was little changed in early trading in New York. The shares have fallen 7.4 percent this year, compared with a 5.9 percent gain in the Standard & Poor’s 500 Index.

LM Wind, the largest blade supplier to GE’s wind business, has 13 factories on four continents. GE plans to maintain LM Wind’s headquarters and management team. GE said it would maintain its ability to source blades from other companies.

The acquisition is valued at 8.3 times earnings before interest, taxes, depreciation and amortization, and should be accretive to earnings in 2018, according to the statement. The deal is expected to close in the first half of 2017.

GE has announced several acquisitions over the past two months, including offers for a pair of 3D-printing companies for $1.4 billion and a $495 million deal last month for software developer Meridium Inc.

S&P Global Ratings cut GE’s credit rating on Sept. 23 over the possibility that the company would add debt to support possible acquisitions.

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