The state controlled power equipment manufacturer China XD Group is in discussion to purchase General Electric Co's shares in its joint venture with Xignux SA of Mexico. The price for the purchase is projected to be near the US$1 billion mark, according to three people knowledgeable with the transaction.
XD Group's negotiations to acquire Prolec GE Internacional is still in the very early stages according to one of the anonymous sources. The joint venture is broken down as GE owning 49.99% of Prolec GE according to a statement by XD Group's listed firm China XD Electric Co back in May 2012.
In 2012, GE shelled out US$536 million for 15% of XD Electric. XD Electric is the country's largest manufacturer of power transmission and distribution equipment. The companies also agreed to create a joint venture in China with XD Electric holding 59% and GE having 41%.
Prolec GE on the other hand builds power transformers and has reported annual sales of US$600 million. Citigroup is providing GE with financial advice on the sale of the venture interest.
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