Boeing Company Makes Another Purchase While GE Hopes to Complete Alstom Deal

Boeing announces its plans to purchase AerData Group and GE sends executives to France to help win favor for its Alstom bid.

May 27, 2014 at 3:00PM
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The Dow Jones Industrial Average (DJINDICES:^DJI)closed the trading day 69 points higher, or 0.42%, continuing the momentum that began before the holiday weekend. In positive news, the Conference Board, a private research group, said its Consumer Confidence Index improved to 83 in May from 81.7 in April, according to Morningstar. The improvement was in line with expectations and emphasizes that the short-term outlook for personal finances, the economy, and jobs, is more optimistic. 

With that in mind, here are a couple of companies making headlines as we kick off the week.

Boeing (NYSE:BA) was one of the Dow's biggest gainers, rising 1.3% at the end of trading. The aviation giant announced today that it is acquiring AerData Group, a Dutch company that provides software solutions for lease management, engine fleet planning, and records management.

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Boeing's 787 Dreamliner pictured. Source: Boeing.

"AerData's tools make it easier for airlines and leasing companies to manage complex maintenance records," Stan Deal, senior vice president of commercial aviation services, Boeing Commercial Airplanes, said in a press release. "Increasing the efficiency of records management helps streamline the process of placing airplanes and other valuable assets with operators during leasing transactions."

This marks Boeing's second acquisition announcement in the last week. On Friday, the company said it was purchasing ETS Aviation, which makes fuel-saving software. Boeing didn't disclose details or terms of the two deals but said it would package the new assets to its customers under the title Boeing Edge. Don't expect these moves to have any direct impact on Boeing's earnings or revenue, but if Boeing Edge can help lure additional airliner customers, it would be a big win.

Also inside the Dow, General Electric (NYSE:GE) has sent more executives to France to try to change the government's skeptical view of GE's proposed bid to purchase Alstom's energy business. Executives from both General Electric and German rival Siemens were to appear this afternoon before the Economic Affairs Committee in the lower house of the French Parliament.

Alstom's energy assets would be a great fit as GE transitions its business focus back to its industrial roots. Alstom's energy assets would add to GE's earnings in the first year and would add roughly $0.08-$0.10 per share in 2016. On top of that, General Electric believes it can generate more than $1.2 billion in cost synergies by the fifth year.

"Acquiring Alstom would put an exclamation point on GE's return to deals," said Bernstein analyst Steven Winoker, according to Barron's. "It is among the best fits we have seen with the GE portfolio for some time." 

Investors would be wise to keep an eye on what could become the largest acquisition in General Electric's history. 

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Daniel Miller has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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