By Maria Armental

The U.S. Justice Department has closed its review of the proposed merger of Wabtec Corp. (WAB) and General Electric Inc.'s (GE) railroad business, clearing the way for the deal to close this quarter.

The proposed deal, valued at roughly $11 billion, was the first major portfolio move under then GE Chief Executive John Flannery's attempt to revamp the industrial conglomerate.

Mr. Flannery was fired in October as the company disclosed deeper problems in its troubled power unit that caused GE to warn that it would miss profit and cash targets.

GE, which is slated to report fourth-quarter results this month, is expected to report its first annual loss since 2015 as it moved to refocus on industrial operations.

GE has most recently laid out a plan to essentially shrink the company to its three core businesses: power, aviation and healthcare. Smaller divisions, such as transportation, would be sold.

Under the terms of the Wabtec deal, GE would get $2.9 billion in cash at closing. GE shareholders would own 40.2% of the combined company and GE own about 9.9%. GE would have to sell its stake in the combined company within three years.

Meanwhile, shareholders of Wabtec, formally known as Westinghouse Air Brake Technologies Corp., would retain 49.9% of the combined company.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

January 14, 2019 19:32 ET (00:32 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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