In the wake of President Trump’s visit to Saudi Arabia, General Electric announced it will sign $15 million worth of business deals to help diversify the Kingdom’s economy away from oil.
GE announced last week at a conference of senior US business executives with their Saudi counterparts its intention to deal with the desert Kingdom to help it diversify.
The agreements are worth about $7 billion in goods and services from GE itself. The range from utilities to healthcare; the oil industry, mining, and natural gas. Some of the deals are still in the form of memos and will need further negotiations to come to fruition.
One of the GE projects will guide power manufacture in Saudi Arabia to become more efficient and also offer digital technology to the operations at Saudi Aramco. The hope is that this project will ultimately create $4 billion in annual productivity increases at Aramco. It also hopes to cooperate in training and medical research.
GE has decided to back out of a deal to sell its appliance business to the Swedish appliance company Electrolux rather than face the US Justice Department who wish to block the sale due to its apparent antitrust nature.
The $3.3 billion deal was first challenged by Justice this past summer when they stated in court that the forging of the two companies into one would lead to “less competition, higher prices and fewer options for millions of Americans.”
GE’s move to terminate the sale should entitle them to receive a $175 million break-up fee, a term they parties agreed on as an insurance in case the deal fell apart.
No verdict was yet reached by the Washington court considering the status of the sale. GE nevertheless exercised its right to terminate the agreement after 15 months of talks. The collapse of the deal is disappointing to Electrolux. The Swedish white goods company was hoping to make themselves into an appliance company giant able to compete with the likes of Whirlpool Corp and equivalent companies in Asia.
“We are disappointed but we are certainly not defeated,” Elextrolux Chief Executive Keith McLoughlin said.