The Southwood Group is seeing an increase of interest in General Electric Company, after the successful purchase of a stake in Chinese power equipment manufacturer China XD Electric Company is finalised.
In what has taken 15 months to come to fruition, it was announced today that G.E has been successful in acquiring a 15% stake in Chinese power equipment company China XD. The deal comes as both companies expect to see a massive increase in the demand for equipment to meet the power infrastructure needs within China as the power grid continues to grow at an unmatched rate.
“2013 has so far been a very good year for shareholders in both companies we have seen excellent returns on investment as both companies have displayed good solid performance throughout the year. As much as this is a acquisition by G.E. the partnership that will be involved is a sound decision for both parties, G.E. brings a lot of experience to the table and China XD is well placed to supply their own domestic market as it goes through rapid expansion,” said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
The stake hold of 15% in China XD cost General Electric Company $552.2 million. The newly formed joint venture will enable the amalgamation to take advantage of the country’s growing energy market by supplying key-grid automation equipment for the growing infrastructure. The joint venture is expected to see G.E. expand sales of power transmission components and services by double to around $4 billion annually by 2013.
The joint venture has already been of benefit to both General Electric and China XD before completion, with speculation of the outcome circulating, share value in both companies benefited. Although a key focus of the partnership will of course be within China, industry analysts point to recent contracts in both European and American supply grids. The U.S. grid in particular has been identified as one where replacement of aging infrastructure will be a pressing concern, both China XD and G.E. share values continue to trend higher with ROI’s of 3.75% and 14.88% respectively.
“Overall this deal has already been paying dividends for shareholders in both companies, now finalised they find themselves ideally placed to capitalise on contracts that are coming on a near daily basis in China and the U.S. We see all of the new possibilities for this partnership as a sign for strong growth, we will be advising clients and new prospective investor’s as this situation develops,” added Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
As an equity-research house, The Southwood Group specialises in providing fundamental research and data analysis, ultimately facilitating trend identification, and finally stock selection. The company has professional managers with extensive experience in all aspects of investing and legal compliance, all of whom had spent their careers in the global finance industry from Hong Kong to New York. It is established on ideals of perseverance, enduring commitment to its clients and, most of all, due diligence.
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