(Reuters) -GE Vernova said on Tuesday it would pay $5.28 billion to buy the 50% stake it does not already own in transformer-maker Prolec GE as the artificial intelligence boom fuels grid equipment demand.
The purchase from joint venture partner Xignux would be funded equally between cash and debt and is expected to close by mid-2026, subject to regulatory approvals.
Demand has exploded for power in the U.S. as Big Tech companies and Silicon Valley startups race to scale AI technology behind services such as ChatGPT. The U.S. Energy Information Administration estimates power consumption will hit record highs in 2025 and 2026, also aided by cryptocurrency mining and increased demand from households and businesses.
“This acquisition aligns with our strategic and financial objectives and is also good for our customers by strengthening our presence in North America, where demand for grid equipment is growing rapidly,” said CEO Scott Strazik.
Prolec GE, the joint venture between Xignux and General Electric, was originally established in 1995.
Earlier this year, it announced a $140 million investment and the creation of 330 new jobs over the next three years in Goldsboro, North Carolina, exceeding $300 million in U.S. and Mexico investments.
The grid equipment supplier employs about 10,000 global employees across seven manufacturing sites globally, including five in the U.S.
Shares of GE Vernova were up marginally in after-hours trading. The company is also scheduled to report third-quarter earnings on October 22.
Morgan Stanley acted as a financial adviser to GE Vernova on the deal, while Skadden, Arps, Slate, Meagher & Flom provided legal counsel.
J.P. Morgan Securities advised Xignux and Sidley Austin served as legal counsel to Xignux.
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Alan Barona)
