General Electric is reportedly closing in on a deal to merge its transportation business, which includes locomotives and railroad services, with Wabtec Corp., an equipmentmanufacturer in therail industry. The resulting company could be worth more than $20 billion.
So says Reuters, which cited two sources familiar with the matterwho declined to be named because of the confidential nature of the talks. While Reuters reported that an agreement mightbe announced as early as this week it also cautioned that the deal could still be scuttled at the last minute.
The two sides are apparently talking about structuring the deal around what is called a Reverse Morris Trust, which could result in a tax efficient transfer of assets.
Neither GE nor Wabtec have responded to a USA TODAY request for comment.
Theres been speculation that GE has been looking to jettison its transportation business as part of CEO John Flannerys ongoing efforts to streamline the Boston-based conglomerate.
GE Transportation reported revenues of $4.2 billion in 2017, down from $4.7 billion the year before. Wabtec, which is based near Pittsburgh in Wilmerding, PA, had 2017 sales of $3.9 billion.
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