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(Reuters) - General Electric Co (GE.N) confirmed on Monday it was unloading the bulk of its transportation business which makes train engines to Wabtec Corp (WAB.N), a U.S. manufacturer of equipment for the rail industry, in a deal valued at about $11.1 billion.

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FILE PHOTO: The logo of General Electric is seen at its plant in Baden, Switzerland November 15, 2017. REUTERS/Arnd Wiegmann/File Photo

The deal, flagged to Reuters by sources who asked not to be named on Sunday, is the biggest done by Chief Executive John Flannery since he announced a major overhaul of the U.S. industrial conglomerate late last year.

GE will receive a $2.9 billion up-front payment in cash and its shareholders will own 50.1 percent of the combined company, while Wabtec shareholders will own the rest, the companies said in a statement.

Wabtec chief executive Raymond T. Betler will remain president and CEO of the merged company while its Chairman, Albert J. Neupaver has been re-appointed executive chairman. GE Transportation Chief Executive Rafael Santana will become president and CEO of Wabtec’s Freight Segment.

The resulting company will have approximately $8 billion in revenues, the companies said. The transaction is expected to close in early 2019.

Shares in both companies rose in trading before the bell on Monday.

PARED BACK TO THE CORE

Flannery told GE shareholders late last year he plans to pare GE down to three core businesses: power, aviation and healthcare, a departure from the deal-driven empire building of his predecessors, Jeff Immelt and Jack Welch.

That should include GE getting rid of at least $20 billion of assets through sales, spin-offs or other means.

Based on Wabtec’s stock price on April 19, the last unaffected trading day prior to media

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