China's XD Group said to be in talks to buy GE's Prolec JV stake

HONG KONG Tue May 14, 2013 6:39am EDT

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HONG KONG (Reuters) - Chinese state-controlled power equipment maker XD Group is in early talks to buy General Electric Co's (GE.N) joint venture with Mexico's Xignux SA for up to $1 billion, a person familiar with the discussions told Reuters on Tuesday.

The sale of the GE stake, known as Prolec GE Internacional, is part of the company's effort to sell non-core businesses, the person said. GE owns 49.9 percent of the company, which makes power transformers.

Last year, GE paid $535 million for a 15 percent stake in China XD Electric Co Ltd (601179.SS), the nation's biggest maker of transmission and distribution equipment and a unit of XD Group.

Bloomberg had first reported on the talks. Prolec GE has annual sales of about $600 million, its report said, citing people with knowledge of the matter.

GE and XD were unavailable for comment.

(Reporting by Denny Thomas; Editing by Michael Flaherty and Ron Popeski)