Alstom is tying up loose ends with General Electric. 

General Electric Co. (GE) will purchase Alstom SA's (ALSMY) stakes in three energy joint ventures for €2.59 billion ($3.07 billion) as the French company exits businesses that were created as part of its much larger energy deal completed in November 2015.

The renewables, grid and nuclear joint ventures were set up three years ago as part of the €9.7 billion sale of the Alstom energy business to GE. Alstom said Thursday it intends to exercise its options to sell its interest in the renewables and grid joint ventures in 2018.

"If these options are exercised during the exercise period (between September 4th and September 10th), GE will then be deemed to have exercised its option to acquire Alstom's interest in the nuclear joint venture," Alstom said in a statement.

All interests from the three energy joint ventures will transfer on Oct. 2, Alstom said.

GE confirmed the agreement with Alstom, adding that "this will not have any impact on the day-to-day operations of those businesses as GE has held operational control since the inception of the JVs."

Under former CEO Jeff Immelt, the Boston-based industrial conglomerate acquired Alstom's energy division after battling with European regulators and rival bids from German industrial manufacturer Siemens AG (SIEGY) . At the time, Immelt said the completion of the acquisition was "another significant step in GE's transformation."

Three years later, however, GE remains in transformation mode as its Power business has struggled amid slowing demand.

"Power is making progress on cost actions and operational and services execution, but the industry continues to be challenging and is trending softer than our forecast," current CEO John Flannery said in an April 20 statement.

GE CEO John Flannery.
GE CEO John Flannery.

Bringing these businesses under GE's umbrella may boost the company's earnings. Under the structure of the joint ventures, GE received 100% of the revenue but only 50% of the operating earnings, William Blair analyst Nicholas Heymann told TheStreet.

The renewables business may provide a 10% increase in operating earnings, while the grid business may drive power earnings by 5% on an operating basis, Heymann said.

Heymann said he believes GE will keep those businesses as they are "both profitable and growing" and are "integral components a part of power," but said GE may sell the nuclear business.

The William Blair analyst expects France to repurchase the nuclear business for approximately $100 million due to the country's reliance on nuclear power. France derives about 75% of its electricity from nuclear energy, according to the World Nuclear Association.

Given that the interests will transfer in October, Heymann said the businesses may slightly increase GE's fourth-quarter earnings, "not materially, but incrementally." The firm has an Outperform rating on GE stock. 

Separately, J.P. Morgan analyst Stephen Tusa expressed doubt about the quality of GE's earnings and the company's guidance.

"The difference between 'adjusted EPS' that is being used by consensus and retail investors to value the stock today, and GAAP, is the widest we have on record, excluding last year, an approximately 50% difference, higher than ever seen during prior CEO Jeff Immelt's tenure, with still worst-in-class consensus FCF conversion," Tusa wrote in a May 9 research note.

"A key aspect as to why GE stock has never found a true relative bottom is that the expectation that had been set was of such low quality it was never truly 'reset,' and therefore the FY2 was always coming down, and therefore never grew, earning the discounted multiple," Tusa explained.

J.P. Morgan rates GE stock at Underweight with an $11 price target. 

Tusa did not respond to TheStreet's request for comment on the Alstom news. 

GE shares rose 0.1% to $14.64 at 2 p.m. New York time.

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