agreed to merge its railroad business with
in an agreement valued at around $ 11 billion, which allows GE to raise some cash to finance its change and lose one of its oldest operations .
The transaction is the first important portfolio movement in the new CEO of GE
John Flannery & # 39; s
attempt to renew the conglomerate that fights. Wabtec, also known as Westinghouse Air Brake Technologies Corp., manufactures equipment for transit systems and freight railways and has a market value of approximately $ 9 billion, based on the closing price on Friday.
GE will receive $ 2.9 billion in cash at closing. The shareholders of GE will own 40.2% of the combined company, and GE will have 9.9% after the agreement.
Wabtec shareholders will retain 49.9% of the combined company. The current president and CEO of Wabtec will maintain their positions after the agreement, which is expected to end early in 2019.
GE has been looking for options for the transportation division since at least last fall. The segment mainly produces cargo locomotives, which sell for millions of dollars each, along with mining equipment and marine engines.
The business of locomotives is cyclical and has been affected by the decrease in demand. In 2017, the unit's revenues fell by 11% and profits fell by 23%. The division represented $ 4.2 billion of GE's total revenues in 2017 of $ 122.1 billion.
The transport unit is one of GE's seven largest commercial lines. The division had approximately 8,000 employees at the beginning of the year, 2,000 fewer than a year earlier, and compares to 313,000 in GE in total.
GE diesel locomotives are badembled primarily in Fort Worth, Texas and western Pennsylvania.  Write to Thomas Gryta at [email protected]