GE Transportation’s $11.1 Billion merger with Wabtec

Jones Day, Mattos Filho, Veiga Filho, Marrey Jr e Quiroga and Davis Polk & Wardwell advised on the deal

Wabtec Corporation (NYSE:WAB) has entered into a definitive agreement to combine with GE Transportation, a unit of General Electric Company (NYSE:GE). The combination will make Wabtec a Fortune 500, global transportation leader in rail equipment, software and services, with operations in more than 50 countries.

Under the agreement, which has been approved by the Boards of Directors of Wabtec and GE, GE will receive $2.9 billion in cash at closing and GE and its shareholders will receive a 50.1% ownership interest in the combined company, with Wabtec shareholders retaining 49.9% of the combined company. The transaction is expected to be tax free to the companies’ respective shareholders.

Both companies are expected to benefit from the cyclical tailwinds they are experiencing as industry conditions improve. GE Transportation revenues and EBIT are expected to grow at double digit CAGRs from 2017A to 2019E as the cycle rebounds from trough levels. The GE Transportation business is positioned for a significant rebound, with estimated adjusted EBITDA growing from about $750 million in 2018 to between $900 million and $1 billion in 2019. The backlog of approximately $18 billion includes about 1,800 new locomotives and approximately 1,000 to be modernized. GE Transportation has received $3.6 billion in orders in the last two quarters. Wabtec reported a strong Q1, also forecasting robust growth for the year with record backlog.

The combination will bring together two global leaders in rail equipment, services and software, combining GE Transportation, a global digital industrial leader and supplier to the rail, mining, marine, stationary power and drilling industries, with Wabtec’s broad range of freight, transit and electronics solutions. Wabtec and GE shareholders will have ownership in a combined company with significantly expanded margins, a highly attractive growth profile based on an improved business mix, expanded global reach, and faster innovation in key growth areas.

Jones Day advised Wabtec Corporation with Robert A. Profusek (Picture) and Peter E. Izanec.

In Brazil, Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados advised Wabtec Corporation with Stephen Charles O’Sullivan, Thiago Jabor, Cleber Venditti, Bruna Bianchini Sato, Gabrielle Graziano and Fabio José Marino Duarte.

Davis Polk & Wardwell advised General Electric with William L. Taylor, Lee Hochbaum, Neil Barr, William A. Curran, Jeffrey P. Crandall, Michael Kaplan, John B. Meade, Sartaj Gill, Pritesh P. Shah and Darren M. Schweiger.


Involved fees earner: Thiago Jabor Pinheiro – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Cleber Venditti da Silva – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Fábio José Marino Duarte – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Bruna Bianchini Sato – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Stephen Charles O’Sullivan – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Gabrielle Graziano – Mattos Filho Veiga Filho Marrey Jr & Quiroga; William Taylor – Davis Polk & Wardwell; Lee Hochbaum – Davis Polk & Wardwell; Darren Schweiger – Davis Polk & Wardwell; Neil Barr – Davis Polk & Wardwell; William Curran – Davis Polk & Wardwell; Jeffrey Crandall – Davis Polk & Wardwell; Michael Kaplan – Davis Polk & Wardwell; John Meade – Davis Polk & Wardwell; Sartaj Gill – Davis Polk & Wardwell; Pritesh P. Shah – Davis Polk & Wardwell; Robert Profusek – Jones Day; Peter Izanec – Jones Day;

Law Firms: Mattos Filho Veiga Filho Marrey Jr & Quiroga; Davis Polk & Wardwell; Jones Day;

Clients: General Electric (GE); Wabtec Corporation;



Author: Ambrogio Visconti