STAMFORD, Conn. — General Electric Co. will buy a water treatment company in Canada for $656 million in a deal that will accelerate the conglomerate's plans to tap into a fast growing market in a thirsty world, company officials said Tuesday.

GE's acquisition of Zenon Environmental Inc. will provide technology to help convert seawater into drinking water and to reuse waste water from municipalities and industry, company officials said.

"We think it will position us as the leader and the lowest cost producer of fresh water from these new sources," said Colin Sabol, chief marketing officer for GE Water and Process Technologies. "We'll be able to make fresh water less expensively than anyone in the world."

The Fairfield-based industrial, financial services and media company entered the water business in 2002.

"We saw water scarcity spreading across the globe," Sabol said.

GE is helping build one of the world's largest water desalination plants in Algeria.

Zenon makes advanced membranes for water purification, wastewater treatment and water reuse. The company pioneered the use of technology for water and wastewater treatment that is spreading rapidly throughout the world, company officials said.

Zenon's technology will lower costs to treat water in the initial step, Sabol said. The membranes are well suited to handle fluctuations in water quality typically associated with seawater and wastewater, he said.

GE's water business, now $2.1 billion, is expected to grow to about $2.5 billion next year and $5 billion in five years, Sabol said.

GE expects to use the new technology in water-thirsty countries such as China, India and Australia.

"It will allow us to accelerate our growth in desalination," Sabol said.

The transaction will require the approval of Zenon's shareholders and regulators.

GE shares rose 11 cents, to close at $33.78 Tuesday on the New York stock Exchange. The stock has traded between $32.21 to $37.34 over the past year.

Source: Associated Press