GE Power, a division of GE (NYSE: GE) has agreed to acquire the Heat Recovery Steam Generator (HRSG) business of South Korea’s Doosan Engineering & Construction (KRX: 011160) for $250 million. The acquisition will help GE Power meet the growing demand for its combined-cycle power plant solutions, which utilize HRSG technology, and continue to expand its customer offerings.
GE Power reportedly outbid Morgan Stanley Private Equity, which competed for the acquisition of Doosan’s HRSG unit. Last year GE completed its acquisition of Alstom Power.
“With the Alstom acquisition, we are now offering full power plant solutions and seeing an even greater demand for our highest-efficiency HA heavy-duty gas turbine plants,” said Steve Bolze, president and CEO of GE Power. “The Doosan Engineering & Construction HRSG acquisition will help us meet our forecasted growth and better manage costs by increasing our global manufacturing capacity and further complementing our existing HRSG technology. We’re also gaining a talent pool that is one of the best in the world.”
“We’re seeing HRSG demand that is more than double historical averages,” said Joe Mastrangelo, president and CEO of GE Gas Power Systems. “Our investment in Doosan Engineering & Construction HRSG will bring us cost-effective, vertically integrated manufacturing and engineering capacity that will allow us to be faster and better as we ramp to meet customers’ needs.”
Doosan has three advanced manufacturing facilities, including one in Korea and two in Vietnam. In operation since 1977, HRSG currently has more than 1,400 employees specializing in engineering, project management and manufacturing. HRSG has been a supplier to GE and others and has been a long-term licensee of Alstom technology until 2007.
HRSG technology is a critical component of a combined-cycle power plant. Capturing the exhaust heat from the gas turbine, the water is converted into steam, which is then used to drive a steam turbine to produce additional power output.
Upon completion of the sale, HSRG will be integrated into GE Power’s Gas Power Systems business, which already includes Alstom’s legacy HRSG business.
GE Power is a world leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. Headquartered in Schenectady, New York, GE Power is GE’s largest industrial business, with more than $27 billion in revenue in 2014 and approximately 38,000 employees serving customers in more than 125 countries.