> Wabtec buys GE Locomotive for $11 billion.

Not really ...

A couple points:

First - It is the GE Transportation Division (often referred to as GETS?), not just the locomotives. Sounds like it involves the locomotive business, transit and mining (huge open pit trucks using diesel-electric drives), and maybe GE-Harris (better known for Locotrol/DPU), I believe there is a signal division (not US&S) and some other rail related electronics.

Second - The Wabtec press release clearly describes it as a "merger" (at least for the moment). Wabtec is paying GE $2.9 billion up front. The combined company is supposed to be worth $11.1B or $10B after taxes. Of the combined company, GE will control 50.1% and Wabtec 49.9%. There won't be any changes until early 2019 when the deal is finalized as they still need stockholder and regulatory approval.

Then GE will spin-off GE Transportation so it will end up initially owned by Wabtec with Wabtec stockholders holding 49.9%, GE stockholders holding 40.2% and GE itself holding 9.9%. Complicated, but it is a large transaction subject to regulatory approval and they're playing the tax game. Not to mention where does Wabtec find the money to buy it.


Who would have ever though that EMD would have become the red headed step child at GM, left out in the cold to an investment group, and then end up owned by a subsidiary of Caterpillar? Now we have GE Transportation that despite having long ago left EMD in the dust and built a new facility in Texas, suddenly finds itself being spun off after 100 years because it isn't making enough profit? I think the Wabtec deal was a stretch because the combined GETS/Wabtec will double the size of the current Wabtec. But at least GE doesn't disappear into Alsthom, Siemans or CRC (Chinese).