GE JUMPS AS US $11.1B WABTEC RAIL DEAL SPEEDS OVERHAUL

General Electric Co. rose the most in a month as chief executive John Flannery took the biggest step yet in his plan to revitalize the beleaguered manufacturer: merging its century-old locomotive business with Wabtec

Corp. in a deal valued at US$11.1 billion. GE and its shareholders will own 50.1 per cent of the combined operations, distancing the company from the cyclical rail market

while still leaving it with an ongoing stake in the recovery of North American freight demand. The deal furthers Flannery’s efforts to streamline operations and reduce the complexity that he blames for deepening the company’s problems. Faced with one of the worst slumps in GE’s 126-year history, the CEO has pledged to cut costs, sell at least US$20 billion in assets.