(Bloomberg) -- Wuhan Boiler Group Co. is considering acquiring General Electric Co.'s controlling stake in a steam power business in China, according to people familiar with the matter.
The state-owned firm is interested in buying the 51% stake in Wuhan Boiler Co. from GE, said the people, who asked not to be identified as the discussions are private. Wuhan Boiler Group is the second-biggest shareholder of the business with a 6.9% stake. A deal could value GE's stake in Wuhan Boiler at a few hundred million dollars, one the people said.
Deliberations are at a preliminary stage and might not lead to any transaction, the people said. A representative for Wuhan Boiler didn't respond to requests for comment, while a representative for GE declined to comment on speculation.
A deal could come as China outlines its ambitions to cut small-scale coal burning to combat pollution. GE also plans to stop supplying equipment to new coal-fired power plants, exiting a market that relies on the dirtiest fossil fuel to focus on gas turbines and renewable energy equipment. Wuhan Boiler Co. is part of GE's steam business.
Wuhan Boiler Co., founded in 1954, designs and manufactures boilers that are used in power plants to produce high pressured steam for electricity generation, according to its website. It was once listed in Shenzhen.
In 2007, Alstom SA, a French rolling stock manufacturer, acquired a 51% stake in Wuhan Boiler Co. for about 339 million yuan ($51 million). GE in 2015 bought Alstom's power and grid businesses for about 12.4 billion euros ($14.7 billion) and became the controlling shareholder of Wuhan Boiler Co.
©2020 Bloomberg L.P.
With assistance from Bloomberg
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