GE Enters into Agreement to Sell Hydro Business

GE today announced that it has signed a definitive agreement to sell GE Energy's hydro business to Pescarmona Group of Companies (PGC), a multinational, privately held group with a strong focus on the hydro industry, in which it has been operating for 100 years through its company, IMPSA.

This sale includes GE Energy's worldwide hydro business, excluding GE's hydro operations in Norway and Sweden. An offer by PGC to purchase the operations in Norway and Sweden is under consideration and after due consultation of local works councils, could result in a subsequent sale agreement.

Terms of the agreement were not disclosed. The closing of the transaction is subject to customary conditions, including the receipt of regulatory approvals, and discussions with works councils and other third parties, and is expected to occur during the first quarter 2007.

"We are pleased to enter into this agreement with PGC and believe this is a positive development for our hydro segment customers, our employees and our shareholders," said John Krenicki, President and CEO of GE Energy. "The move positions PGC to provide additional value to hydro customers by combining the tremendous industry expertise of our hydro employees, as well as GE's hydro technology and assets with PGC's existing operations, through IMPSA."

"Although GE's hydro team has been delivering solid performance improvements, the business has re-evaluated the position of the hydro segment with respect to other growth opportunities. We believe the sale of our hydro operations to PGC will position them to meet hydro customer needs, while structuring the operations for continued growth and stability over the coming years, and allow GE Energy to focus on other segments of the power generation industry," added Krenicki.

Besides having its main focus on the hydro industry, PGC maintains a presence in businesses such as wind power generation and equipment, port systems, automobile parts, control systems, environmental services and insurance. It employs more than 6,000 people and operates in 27 countries. IMPSA is a global provider of integrated solutions for renewable energy generation through 160 projects in more than 40 countries. The group maintains a presence in Argentina, Brazil, Ecuador, China, India, Malaysia, the Philippines, Venezuela, Columbia, USA, Spain, South Africa and Indonesia.

"Through this acquisition, PGC enhances its position as a global player within the hydro industry, with presence and production facilities in North and Latin America, Europe and Asia," said Enrique Pescarmona, Chairman, PGC. "Since GE's hydro business and IMPSA have complementary operational and technological footprints, they would be able to cooperate to serve clients in all major regions of the globe. New growth opportunities for the new hydro business are in the Engineering, Procurement, Construction (EPC) and Build, Operate, Transfer (BOT) arrangements. This acquisition would benefit both companies as it would give them scale, an integrated team with some of the most qualified professionals available in the industry, a global low-cost production footprint, access to financing for growth, and some of the best and most competitive available technology."

GE Energy's hydro segment is headquartered in Schenectady, NY and employs approximately 2,000 people globally.

By General Electric