What's going on?

General Electric (GE), which calls itself the world�s leading �digital� industrial company, jumped further down the �digital� route on Tuesday by agreeing to buy two 3D printing companies for a combined cost of $1.4 billion.

What does this mean?

3D printing takes a design from a computer and layers metal powder horizontally in order to manufacture the desired product (this video explains it well). According to GE, manufacturing with 3D printing creates more durable products and massively increases the potential for new designs (in short, it could be a game-changer for manufacturing). In recent years, GE has made a priority of investing in its 3D capabilities. The two companies that it agreed to purchase on Tuesday (Sweden�s Arcam and Germany�s SLM Solutions) have created complementary 3D technology that GE will combine with its existing 3D capabilities.

Why should I care?

For the stocks: It�s a much bigger deal for the companies being acquired than for GE.

Arcam and SLM saw their stock prices jump 53% and 40%, respectively. Both companies are effectively being rewarded for creating technology of significant value. But $1.4 billion isn�t much to GE, a company that�s worth $280 billion. The news is indicative though of GE�s overall strategy to be a �digital� industrial leader. It aims to build a competitive position in what it says is the fast-growing industry of 3D printing. If successful, it will likely be positive for GE�s stock price over the long-term.



The bigger picture: Other 3D printing companies could become takeover targets.

If GE�s competitors feel that they are being left behind in a race to develop 3D printing capabilities, they could make acquisitions of their own in an effort to close the gap. That would, of course, be a positive for firms in the space that have developed effective technology.