GE Signs New Deals With Saudi Arabia To Strengthen Ties
Zacks Investment Research | May 26, 2017 08:36AM ET
Despite the ongoing rivalry between Saudi Arabia and American shale oil companies, Saudi Aramco recently signed a deal with the U.S. worth approximately $50 billion, during President Trump’s visit to the country. This deal will help the countries boost their bilateral business ties.
Following the deal, General Electric Company (NYSE:GE) inked memorandums of understanding (MoU) and deals worth $15 billion with Saudi companies. These deals included a MoU with Aramco for the digital transformation of Aramco’s operations in order to generate $4 billion in annual productivity improvements.
General Electric recently entered into a joint venture with Dussur to manufacture gas turbines in Saudi Arabia by the end of the year. The deal is worth 1 billion riyals ($267 million).
The manufacturing of General Electric's H-Class turbines in Saudi Arabia is expected to start before the end of the year, while the first turbine is expected to be completed in 2018.
This deal aims to develop the industrial sectors in Saudi Arabia as part of the government's plan to create jobs and diversify the oil-dependent economy.
The joint venture followed a MoU signed between both the companies last year, per which, the deal is expected to draw nearly 3.75 billion riyals of investment by both the companies in 2017. According to the deal, General Electrics has stake of 45% while Dussur has 55% stake.
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