GE's 3-D Printing Buys Set to Fail After Activist Elliott Intervenes

By Eyk Henning 

General Electric Co.'s $1.4 billion move to buy two European 3-D printing firms looks set to fail after the U.S. conglomerate said it wouldn't bow to pressure from one of the world's best known activist investors.

GE said Friday it wouldn't improve its offer for SLM Solutions Group AG, a German 3D-printing machine maker. The statement came just hours after two funds of Elliott Management Corp. said they had amassed more than a 20% stake in SLM and would reject GE's bid saying the offer undervalued the company.

GE's offer for SLM is dependent on 75% of shareholders tendering their shares, making Elliott refusal a formidable stumbling block that will likely upend the deal.

Elliott also said it had taken a 10.14% stake in Sweden's Arcam AB, the other company GE recently proposed to buy, meaning GE won't be able to meet the minimum acceptance threshold of at least 90% of shareholders agreeing to the deal. A spokesman for Elliott declined to comment on the fund's plan regarding Arcam.

GE announced plans to buy both companies in early September to expand its ability to make aircraft components and other parts using so-called additive-manufacturing technology, or 3-D printing. Both European companies are leading names in the sector.

SLM makes laser machines that form metal components used in the aircraft and automobile industry.

Arcam, founded in 1996 and based near the city of Gothenburg, invented an electron beam melting machine used in the aerospace and orthopedic implant industry.

GE said the twin acquisitions would help it produce complex metal parts at lower weights and lower costs than traditional forged or cast parts.

"Eventually, companies here are going to hit escape velocity in terms of scale," GE Chief Executive Jeff Immelt told investors on a conference call in September, referring to the makers of additive-manufacturing machines. "We want to be one of the companies that does that."

Elliott's opposition to the SLM deal came just ahead of Friday's deadline for GE to potentially change its offer. Without the extension or change, the tender ends Monday.

(END) Dow Jones Newswires

October 21, 2016 07:07 ET (11:07 GMT)

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