General Electric's acquisitions of Dresser and Alstom

GE's Recent Acquisitions

General Electric Co. has developed to become the most acquisitive industrial firm across the globe since its inception. The company is renowned for spending huge amounts of money on takeovers or acquisitions as part of its strategy to ensure increased growth and profitability. In essence, General Electric's acquisitions are fueled by the focus on ensuring good returns across its operations through obtaining a considerable market share and competitive advantage. Acquisitions are important strategies in the company's operations given that they are regarded as initiatives that enhance organic growth. In the past few years, General Electric has made several acquisitions including the acquisition of Dresser Inc. and Alstom.

GE's Acquisition of Dresser Inc.

General Electric completed a $3 billion takeover of Dresser Inc., which is an international energy infrastructure technology and service provider in 2011 (Reuters, 2011). This acquisition transformed the international energy portfolio of GE by expanding its energy offerings and industrial customers throughout the world. Following the acquisition, GE enhanced its focus on research and development to Dresser's tailor made solutions and provided an opportunity for workers to significantly expand their businesses.

Reasons

General Electric's acquisition of Dresser Inc. is justified by the need for growth, which is the reason for the takeover. This acquisition was geared towards increasing GE's market share without necessarily having the company to do it by itself. Actually, this takeover focused on promoting GE's growth by enhancing its offerings for energy and global industrial customers.

Sources

Generally, companies usually experiences integrations difficulties following mergers and acquisitions because of several reasons and factors. These integration difficulties occur during the post-acquisition phase and usually occur in different forms. Some of the most common difficulties include challenges in establishing effective working relationships, different financial and control systems, and combining dissimilar corporate cultures. The source of integration difficulties that is seemingly of concern in GE's acquisition of Dresser Inc. is working relationships. This is primarily because General Electric has different management styles as compared to Dresser Inc. While the companies are a natural fit together, they have different management styles, particularly because Dresser has custom solutions for its employees. This would present integration difficulties since GE would need to understand these solutions and develop management styles that promote effective working relations with GE's employees.

GE's Acquisition of Alstom

The second recent acquisition by General Electric is its takeover of Alstom SA, which was supported by the French government in 2014 for $13.5 billion. The acquisition of Alstom SA was geared towards expanding General Electric's power business though Alstom was already making losses in its power engineering business. Notably, GE did not completely absorb Alstom's businesses but focused on its bulk operations i.e. gas turbine and steam turbine businesses (Team, 2014).

Summary

General Electric's acquisitions of Dresser Inc. and Alstom provide important lessons regarding strategic development through mergers and acquisition. First, these takeovers show that acquisitions can be part of strategic development initiatives towards expansion of operations and market share. Secondly, the acquisitions demonstrate that strategic development can be carried out by a company without necessarily undergoing the normal growth process through acquiring other businesses. With regards to implementation, the consideration of organizational factors is crucial during acquisitions in order to ensure effective integration after a takeover.

Conclusion

General Electric is a company that has experienced tremendous growth and profitability through a series of acquisitions. The organization's takeover of other businesses is fueled by the need to grow its market share through expanding operations. As evident in this analysis, growth is an important factor in mergers and acquisitions, which help expand operations. However, the effectiveness of acquisitions can be hindered by integration problems that take place afterwards.