Shanghai, China (4E) – General Electric announced that it has struck a strategic alliance with China XD Electric Co., a move seen to tap into the huge electrical infrastructure market in the world’s second-largest economy.
This year, the U.S. diversified conglomerate purchased a 15 percent stake in the Xian, Shaanxi-based company for $546mn, elevating it as the second-biggest shareholder in the company. Parent firm China XD Group holds a controlling stake of 51.10 percent.
Both companies also agreed to enter a joint venture for the distribution of GE’s electrical grid solutions to XD’s domestic customers. GE’s advanced management experience could also help Electric’s plans to expand its operations overseas.
XD’s board chairman Zhang Yalin said the transaction would benefit the company in strengthening its traditional market while serving the structural changes in the Chinese energy industry.
China XD Electric is among China’s largest contractors for power transmission and distribution engineering. Formed in 1986, the company exports products and technologies to at least 40 nations and regions including the U.S., Germany, Hong Kong, Southeast Asia, Africa, the Middle East and South Asia.
GE Energy Management’s president and Chief Executive Dan Janki said the cooperation means the two companies can offer solutions to China’s fast growing transmission and distribution sector. The deal will also boost GE’s competitiveness in China, added Mr. Janki.