GE buys the HRSG unit of Korea's Doosan Co. for $250 million

General Electric Co. (GE) recently purchased the heat recovery steam generator (HRSG) division of  Doosan Engineering & Construction Co. of Korea for $250 million dollars.

Doosan's HRSG division began in 1977 and currently includes a factory in Korea and two more in Vietnam. The division employs more than 1,400 people who are mostly engineers and production workers.

Increased Revenue

GE sells HRSG equipment and by purchasing Doosan's HRSG division the company can sell more equipment and also provide after sales service generating more revenue for GE.

Prior to purchasing Doosan, GE bought the energy assets of Alstom in 2015 for $9.5 billion dollars. Alstom helped GE increase its sales of HRSG equipment from 14 to 30 units a year but they did not have the full capability to provide sufficient after sales service.

Doosan's assets will provide the engineering and manufacturing technology to repair and maintain the HRSG equipment that GE sells.

Synergy and No Layoffs

The deal between GE and Doosan was first reported by Reuters in May 2016. The deal required the approval by South Korean regulators and Doosan shareholders. It was reported then that the deal would create synergy for both companies and layoffs of Korean workers would not take place.