By Friedrich Geiger
Shares in GEA Group AG jumped Wednesday after the mechanical
engineering company said it would sell its heat exchangers unit to
Triton Advisers Ltd., exiting the business to increase focus on
food processing equipment.
The divestment, valued at EUR1.3 billion ($1.8 billion), gives
GEA the financial headroom to pursue acquisitions in its core
business of food and processing industry technologies, it said.
As part of its midterm strategy, GEA said last June it would
shed the heat exchanger business, called HX, due to a lack of
synergies with its core operations. Heat exchangers are used in air
conditioning systems and cooling towers.
Shares rose as much as 6.8% in early trading, after the price
surprised on the upside, analysts at DZ Bank and Baader Bank said.
The transaction still requires antitrust approval but is expected
to close by year-end.
Triton invests in medium-size businesses in the industrial,
business services and consumer/health sectors. Regionally, it
focuses on Germany, Switzerland, Austria and the Nordic
countries.
Earlier this month, Triton agreed to buy Alstom SA's steam
auxiliary components business for EUR730 million, part of Alstom's
noncore disposal program. Since the beginning of the year, it has
also made other investments in Germany and Norway.
"As an investor, Triton can offer a new perspective, enable us
to leverage our growth potential and develop the company into an
internationally important provider of heat exchange solutions,"
said Christoph Michel, the head of GEA's HX business.
Separately, GEA reported its first-quarter sales rose 2.9% rise
to EUR951 million. With the divestment of HX, GEA will increase its
food processing technology share to over 70% of group revenue, it
said.
Full results for the quarter are due May 6.
Write to Friedrich Geiger at friedrich.geiger@wsj.com
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