The companies have signed an agreement covering GE's acquisition of Ionics in what is reported to be an all cash merger for $44 per share. Ionics will operate as part of GE Infrastructure's Water & Process Technologies business following the completion of the transaction.
GE has been snapping up smaller companies in recent months, despite having paid €8.1 billion for Amersham last April. The US conglomerate made three acquisitions in the closing weeks of 2004, with the Ionics deal coming after a $1.4bn offer for fire detection technology firm Edwards Systems and a $4.4bn offer for Citigroup's transportation finance unit. Meantime, GE sold off its HVAC motor operation for $379m.
Bill Woodburn, president and chief executive officer of GE Infrastructure, said that the combination of Ionics' and GE's water purification operations would provide 'significant revenue and cost synergies'.
He added that the link-up would enable GE to focus its resources on developing technologies that "increase access to safe drinking water and provide industrial customers with greater access to ultrapure water sources."
GE's existing water business provides engineered specialty chemical treatment programs for water and process systems in industrial, commercial and institutional facilities. The company's products are used in plant utilities such as boilers, cooling towers and wastewater systems, as well as in manufacturing operations. GE employs more than 2,000 scientists and engineers focused on water quality.
The company said combining its operations with Ionics' will help give it the technology, project experience and service network necessary to compete globally in the water business.
The merger is subject to the approval of the holders of at least two-thirds of Ionics outstanding common shares, usual government approvals and other customary conditions. It is expected to close during the first half of 2005.