General Electric Co ( GE.N ) is nearing a Deal to merge its Transportation Business, which manufactures train engines, with Wabtec Corp ( WAB.N ), a U.S. maker of equipment for the rail industry, two people familiar with the matter said on Sunday.

It would be the biggest deal thus far to be inked by GE Chief Executive Officer John Flannery, who took over last August with a mandate to slash costs and boost the U.S. industrial conglomerate’s plummeting stock price.

There is always a possibility that the deal talks, which center on using a tax-efficient structure called a Reverse Morris Trust, could collapse at the last minute, the sources cautioned.

Flannery told GE’s annual shareholder meeting last month that the company is “keenly aware of the pain” caused by its poor performance and dividend cut last year.

Executives are trying to turn around the ailing power and oil and gas businesses, he told shareholders, adding that there is evidence of “green shoots” of improvement.

GE’s transportation business, which generated revenue of $4.7 billion, manufactures freight and passenger trains, marine diesel engines and mining equipment, among other products.

The logo of General Electric Co. is pictured at the Global Operations Center in San Pedro Garza Garcia, neighbouring Monterrey, Mexico.Photo: REUTERS/Daniel Becerril