(Reuters) - General Electric Co (GE.N) said on Tuesday it was buying two mining equipment firms, Australia’s Industrea Ltd IDL.AX for $700 million as well as a privately held U.S. company, as it seeks to boost its presence in a $61 billion industry.
Chief Executive Jeff Immelt has stepped up GE’s presence in resource rich countries, including the oil-rich Middle East, although the company has stepped back from large-scale acquisitions after making an $11 billion wave of takeovers in the energy sector in 2010 and 2011.
In addition to Industrea, which makes equipment used in the underground portion of mines, GE has also signed a binding letter of intent to buy Fairchild International of Glen Lyn, Virginia, for an undisclosed sum.
The two businesses will be folded into GE’s transportation unit, which also makes railroad locomotives, heightening that division’s competition with fellow U.S. blue chip Caterpillar Inc (CAT.N). GE already makes power systems, as well as water purification equipment used in mining.
Industrea mainly sells to customers in Australia and China - two markets that Fairfield, Connecticut-based GE has highlighted as key growth opportunities, said Lorenzo Simonelli, president and chief executive of GE Transportation.
“Australia is an interesting marketplace for us and for the rest of GE,” Simonelli said in an interview. GE will aim to distribute its products to a wider range of countries, he said.
Immelt has said he is interested in buying small companies with interesting technology that GE can grow, and has repeatedly told investors he is not planning to do a “big deal” in 2012.
GE said it expects both deals to close later this year. ($1 = 1.0024 Australian dollars)
Reporting by Scott Malone; Editing by Edwina Gibbs