General Electric Is Investing More Here While Pulling Back Elsewhere

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General Electric ( GE ) is raising its stake in 3D printing company Arcam Aktiebolag to roughly 95% from 77% and eventually will take complete ownership, even as the industrial giant looks to shed a broad portfolio of businesses.

[ibd-display-video id=3047833 width=50 float=left autostart=true] GE will buy the new shares from hedge funds Elliott Management and Polygon Investment Group for 345 Swedish crowns ($41.63) per share. The transaction is expected to close on Friday.

In September 2016, GE agreed to pay $1.4 billion total for stakes in Arcam and German 3D printer SLM Solutions Group. The SLM deal fell through, but GE acquired a 75% stake of another 3D company, Concept Laser, in December 2016 in a transaction valued at $599 million.

GE sees a growth opportunity in the "additive" industry, where everything from jet engine parts to medical instruments are being produced with 3D printing.

Meanwhile, GE is in the midst of a major restructuring of its vast industrial portfolio. In November, CEO John Flannery announced the company will focus on three core segments - aviation, power and health care - going forward, while vowing to sell more than $20 billion in assets.

But Wednesday's move suggests that the 3D printing business will remain a part of GE's operations in the future.

GE also has invested approximately $1.5 billion in manufacturing and additive technologies at its global research center in New York state.

Shares of GE closed up 0.3% at 17.38 on the stock market today , but have lost 44% year to date, making it the worst-performer on the Dow Jones industrial average by a wide margin. Among 3D printing stocks, 3D Systems ( DDD ) fell 1.3%, Stratasys ( SSYS ) climbed 0.3% and ExOne ( XONE ) added 1.3%.

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Arcam invented electron beam melting machines for additive manufacturing, and produces advanced metal powders for customers in the aerospace and orthopedic industries, GE said in a statement.

GE plans to eventually acquire all remaining outstanding shares of Arcam in a compulsory buyout procedure, the industrial giant added. It also intends to have Arcam's shares eventually delisted on the Stockholm exchange.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: GE , DDD , SSYS , XONE

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