Summary
General Electric Company (GE) announced on February 10, 2022, a significant development regarding its Steam Power division. The company has entered into a non-binding memorandum of understanding to sell a portion of its GE Steam Power business to Électricité de France S.A. (EDF). This planned divestiture will lead to the reclassification of the affected business segment as 'held for sale' in the first quarter of 2022. As a consequence of this planned sale, GE anticipates recognizing a non-cash, pre-tax impairment charge estimated between $0.7 billion and $0.8 billion, related to the remaining intangible and fixed assets within the Steam Power division. Despite this charge, the transaction is projected to result in a significant gain upon its expected finalization in the first half of 2023, contingent upon the completion of necessary consultation processes and satisfaction of closing conditions. Investors should monitor the progress of this divestiture as it represents a strategic move in GE's ongoing portfolio transformation.
Key Highlights
- 1GE has signed a non-binding MOU to sell a portion of its Steam Power business to EDF.
- 2The divested business will be classified as 'held for sale' in Q1 2022.
- 3GE expects to record a non-cash, pre-tax impairment charge of approximately $0.7 to $0.8 billion.
- 4The impairment charge is related to remaining intangible and fixed assets in the Steam Power division.
- 5The sale transaction is targeted for completion in the first half of 2023.
- 6The transaction is expected to result in a significant gain for GE.
- 7The deal is subject to consultation processes and satisfaction of certain closing conditions.