GE Vernova to Buy Out Prolec GE JV in $5.275B Grid Bet
Deal for remaining 50% stake aims to capture full value of profitable transformer business amid soaring electricity demand.
GE Vernova (NYSE: GEV) announced a definitive agreement to acquire the remaining 50% stake in its Prolec GE joint venture from partner Xignux for $5.275 billion, a strategic move to fully control a highly profitable supplier of grid technologies amid surging global electricity demand.
The deal positions GE Vernova to capture the full financial benefit of a key asset within its fastest-growing Electrification segment. Prolec GE, a major manufacturer of electrical transformers, is projected to generate approximately $3 billion in revenue with an adjusted EBITDA margin of around 25% in 2025, according to a .
The acquisition, expected to close by mid-2026, will be financed through an equal mix of cash on hand and new debt. It represents a significant bet on the future of the North American power grid, which is under pressure to expand and modernize to support the proliferation of data centers, industrial electrification, and electric vehicles.
"This acquisition is a natural next step for us and is aligned with our strategy to create a more focused, pure-play energy transition leader," said Scott Strazik, CEO of GE Vernova. "By taking full ownership, we will be able to capture the full value of a highly attractive, accretive business that is core to our Electrification segment and essential to the future of the grid."
Strategic Pivot to Electrification
Since its spin-off from General Electric in April 2024, GE Vernova has worked to solidify its position as a central player in the global energy transition. While its Wind segment faces ongoing challenges, the Electrification business has emerged as a powerful growth engine. In its second-quarter 2024 results, the segment reported a 19% increase in revenue and a significant expansion in its order backlog.
The Prolec GE acquisition doubles down on this strength. Transformers are critical, long-lead-time components for grid infrastructure, and a supply crunch has made manufacturers like Prolec GE increasingly valuable. The joint venture, originally formed in 1995, operates seven manufacturing facilities globally, with five located in the United States, positioning it to capitalize on domestic infrastructure spending.
Demand for these components is accelerating. Prolec GE has recently announced investments of over $140 million to expand its manufacturing capacity in North Carolina and Louisiana to meet what it calls "unprecedented demand."
Market Reaction and Financial Outlook
Shares of GE Vernova have performed strongly since the spin-off, trading near the high end of their 52-week range. The company has garnered favorable ratings from Wall Street, with a significant majority of analysts rating the stock as a 'Buy' or 'Strong Buy'.
The acquisition is expected to be accretive to GE Vernova's earnings per share. The company anticipates continued low double-digit revenue growth for Prolec GE in the years following the 2025 projections, fueled by grid modernization and expansion projects across the Americas.
By fully integrating Prolec GE, Vernova gains greater control over its supply chain for critical grid components and enhances its ability to serve a customer base grappling with urgent upgrade cycles. The move provides a more robust and predictable revenue stream, helping to balance the more volatile project-based revenues from its Power and Wind segments.
"The energy transition is driving significant investment in the grid, and we believe our Electrification segment is well-positioned to benefit from this trend," Strazik added. "Fully owning Prolec GE allows us to better serve our customers, particularly in North America, with a more comprehensive and competitive portfolio."
The transaction is subject to customary closing conditions and regulatory approvals.