The digital energy business of General Electric Company (GE) is entering into a joint venture with China XD Electric Co (China XD). Under the terms of the joint venture, GE will invest $535 million to acquire a 15 percent equity stake in China XD.
The partnership will provide a full line of electric transmission, distribution and grid automation solutions to customers globally. GE is expanding into China as the growing middle class requires more electricity.
GE’s digital energy business supplies smart grid secondary equipment, and state-controlled conglomerate China XD is a global supplier of smart grid primary equipment.
A Skadden team led by China partner Gregory Miao, New York-based partner Daniel Dusek and Shanghai-based counsel Zhan Zhao is representing China XD. Partners Jiping Zhang and Liping Li of Haiwen & Partners, meanwhile, are acting as PRC counsel to China XD. Advising GE is a Weil, Gotshal & Manges team led by China practice head Steven Xiang, Shanghai-based partner Suat Eng Seah, Beijing-based counsel Wenfeng Li, and New York partners Howard Chatzinoff and Charan Sandhu.
Reuters reported that the joint venture would give GE access to "primary" equipment such as large transformers and breakers that modify and switch power within the grid, Bob Gilligan, president and chief executive officer of GE's digital energy business, said in an interview.
China is one of the fastest growing transmission and distribution (T&D) markets in the world, and ChinaXD has developed technology used on a large scale for a competitive portfolio of products, he said.
"GE is continuing to look for alternative ways to grow and expand its business," said Gilligan. "This investment helps us better serve energy-intensive industries like utilities, like mining, like steel."
GE, the largest U.S. conglomerate, will appoint a representative to China XD's board of directors. ALB
Candice Mak is North Asia Editor at ALB. Follow her on Twitter: @ALB_Magazine.
Other related stories: