GE has formed a new global partnership with XD Electric Group, combining GE's grid automation capabilities and global energy presence with XD Electric's comprehensive portfolio of high-voltage (HV) power equipment.
According to the agreement, which was originally announced in May 2012, GE has purchased a 15% stake in XD Electric, an HV power equipment manufacturer.
The global transmission and distribution (T&D) industry is estimated to be worth $100bn and by partnering with XD Electric, GE hopes to be a new global competitor to provide customers with HV technology offerings in the industry.
In addition, the partnership also included the formation of a joint venture (JV) with XD to offer customers in China GE's localised grid automation equipment and services.
Through the partnership, GE and XD will offer end-to-end T&D solutions to meet the demand for electricity in emerging economies.
Weil, Gotshal & Manges and Fangda Partners acted as GE's lead legal advisers, while Citigroup acted as sole financial advisor on the transaction.
GE Energy Management president and CEO Dan Janki said: "Our investment in XD Electric is core to our long-term strategy to build a world-class T&D franchise and become a leading provider of grid modernisation solutions.
"By combining the strengths of both GE and XD Electric, we will offer full-scope solutions to customers in the rapidly growing T&D industry. The partnership will enhance our ability to compete in fast-growing regions such as China where XD Electric has a strong presence."
XD chairman of the board Zhang Yalin said: "This partnership between XD and GE is a comprehensive collaboration focusing on technology, capital investment and segment exploration. By combining the strengths of both companies, the partnership will help XD meet the demands of the entire T&D segment for years to come.
"Additionally, by partnering with GE, we will be able to achieve our strategic objective of globalisation sooner and become a stronger competitor in the global segment."
GE Digital Energy business president and CEO John Lavelle said, "With the world's electricity demand expected to increase by more than 70% by 2035 and global grid modernisation investments expected to grow by 10% for the next five years, we are better able to help utilities and industrial customers upgrade and expand their electrical infrastructure."
Image: General Electric Building at Lexington Avenue, New York. Photo: courtesy of Fletcher6.