GE shook the world of 3D printing last month when it announced a bid to acquire leading metal 3D printer manufacturers Arcam and SLM Solutions for a combined $1.4 billion. The acquisitions would mean that one of the world’s largest conglomerates stood to become a 3D printer manufacturer and would signal the validation of metal 3D printing technology as a viable option for the larger manufacturing industry.
That big news, however, has since been somewhat deflated, as a key player in the deal suddenly decided to obstruct the transaction. After GE’s initial announcement, the billionaire CEO of hedge fund Elliott Management Corporation, Paul Singer, increased his share of SLM to 20 percent, giving him a more aggressive position in the company. Upon obtaining this substantial stake in SLM, the hedge fund argued that GE’s offer was "not in the best interests of SLM shareholders.”
For the purchase to go through, at least 75 percent of SLM shares must be turned over to GE, which, as of Oct. 14, now owns 40 percent of the metal 3D printing firm. Therefore, with Elliott Management holding 20 percent of the 35 percent necessary for the deal to move to the next stages, the hedge fund may be a significant obstacle.
Elliott Management exerted its influence in the Arcam deal as well. In order to purchase Arcam, GE was looking for at least a 90 percent stake in the company, but Elliott Management also owns 10.14 percent of Arcam. The hedge fund’s opposition to the deal may have thus blocked that deal from taking place. As a result, shares in all three publicly traded companies (GE, Arcam and SLM) tumbled on Oct. 21.
The purchases were set to close earlier in October, but rather than raise the offer price for the two companies, GE decided to extend the offer period to Nov. 1, aiming to pressure SLM stockholders to vote in favor of the acquisition and hoping that the hedge fund changes its decision in regards to Arcam.
Singer has a history of investing in European companies set to be acquired in order to hold out for a better price, as well as maintain minority shares in firms to prevent complete takeovers. GE Chief Financial Officer Jeff Bornstein told Bloomberg Markets that if the deal does not succeed, GE may walk away from the deal altogether: “We and the leadership at SLM think the offer we put on the table was a very good offer. We have other options.”
Among the options that GE may have is the purchase of Concept Laser, which admitted that an unnamed company had sought its purchase. Concept Laser, which manufactures selective metal 3D printing technology similar to that produced by SLM, has made public the possibility of being sold for $669 million. Arcam, however, is the only company to manufacture systems that 3D print metal with electron beam melting, which is used in aerospace and orthopedics.
Nov. 1 is about a week away, so we’ll just have to hang on tight until then.