General Electric Taking over Jenbacher
THE GE / JENBACHER CASE
Final Paper
International Mergers and Acquisitions (0926)
Florian Köller 0251208
The purpose of this paper is to discuss the strategic rationale and the possible implications for General Electric (GE) when taking over the Austrian turbine producer Jenbacher. For a better breakdown of the different aspects of this issue the paper is subdivided into the following sections:
Business rationale
Logistical aspects
And legal implications
1. Business rationale
Jenbacher Aktiengesellschaft is an Austrian company, headquartered in Jenbach in the region of Tyrol. Jenbacher is a leading manufacturer of gas reciprocating engines and generator sets for power generation applications ranging up to 3 megawatts. Besides the company is known for its innovative capabilities in the sector of cogeneration and the utilization of biogas and waste gases.
Therefore an acquisition of Jenbacher would enable General Electric to gain the position of a market leader in this field while incorporating the know-how in order to retain the competitive advantage. Here are the most important business implications:
Jenbacher would be integrated with GE distributed power, a unit of GE Power Systems. As a typical conglomerate GE has all the necessary expertise to integrate a company like Jenbacher, particularly since they are operating in a field of the industry, where GE is still lacking a leadership position. Therefore the overlap in the business itself is rather low whereas the strategic fit is significant. The synergies created through this acquisition would be mostly in terms of economies of scale and scope. While Jenbacher offers GE the opportunity of gaining a leading position in this sub segment of the industry of power generation with reciprocating engines, GE improves Jenbacher's growth opportunities through its market expertise, distribution network and easy access to capital. The increased market power of the combined companies
Final Paper
International Mergers and Acquisitions (0926)
Florian Köller 0251208
The purpose of this paper is to discuss the strategic rationale and the possible implications for General Electric (GE) when taking over the Austrian turbine producer Jenbacher. For a better breakdown of the different aspects of this issue the paper is subdivided into the following sections:
Business rationale
Logistical aspects
And legal implications
1. Business rationale
Jenbacher Aktiengesellschaft is an Austrian company, headquartered in Jenbach in the region of Tyrol. Jenbacher is a leading manufacturer of gas reciprocating engines and generator sets for power generation applications ranging up to 3 megawatts. Besides the company is known for its innovative capabilities in the sector of cogeneration and the utilization of biogas and waste gases.
Therefore an acquisition of Jenbacher would enable General Electric to gain the position of a market leader in this field while incorporating the know-how in order to retain the competitive advantage. Here are the most important business implications:
Jenbacher would be integrated with GE distributed power, a unit of GE Power Systems. As a typical conglomerate GE has all the necessary expertise to integrate a company like Jenbacher, particularly since they are operating in a field of the industry, where GE is still lacking a leadership position. Therefore the overlap in the business itself is rather low whereas the strategic fit is significant. The synergies created through this acquisition would be mostly in terms of economies of scale and scope. While Jenbacher offers GE the opportunity of gaining a leading position in this sub segment of the industry of power generation with reciprocating engines, GE improves Jenbacher's growth opportunities through its market expertise, distribution network and easy access to capital. The increased market power of the combined companies