Wabtec expects GE deal to close in 2019, as stock price goes on wild ride

Pittsburgh Post-Gazette

Wabtec Corp. said it expects its $11 billion merger with General Electric to be completed sometime during the first three months of 2019, even as debate among Wall Street analysts has sent the Wilmerding manufacturer’s stock price on a roller coaster ride.

Wabtec, which provides products and services to the freight and passenger rail industries, updated investors on the status of the gigantic deal in a press release on Friday followed by an amended proxy statement filed Monday with the U.S. Securities and Exchange Commission.

In addition to putting a specific timeline on the deal, which has been announced in May, the company made a “minor adjustment” to its calculations on merging GE Transportation’s financial records into Wabtec’s accounting policies. The change resulted in a $63 million decrease in revenue and earnings it had forecasted for 2019.

The company insisted the changes have no material effect in future years and do not change its outlook. Company officials sought to reiterate the rationale for the mega-deal, which, if approved, would double Wabtec revenues to $8 billion. A rebound in the freight market and consistently rising passenger rail sales will be a boon to shareholders, executives have said.

“We are even more confident than when we announced the transaction in May that this combination will serve the best long-term interests of our shareholders,” Albert J. Neupaver, Wabtec’s executive chairman, said in a statement.

Not all analysts buy into that logic.

A research note on Friday from Stephen Tusa, a New Yorkbased analyst for JPMorgan,