General Electric Co. has closed an $11.6 billion (euro8.46 billion) sale of its plastics division, taking the final step in the long-anticipated divestiture.
The sale to petrochemicals manufacturer Saudi Basic Industries Corp. is part of the Fairfield-based conglomerate's strategy of selling slower growth and volatile businesses such as insurance and invest in high-growth, high-technology businesses, such as health care and water processing technology.
The deal is expected to create a net gain, after taxes, of $1.5 billion (euro1.09 billion).
GE will use the proceeds of the sale to complete its current $27 billion (euro19.7 billion) stock buyback program, with $12 billion (euro8.76 billion) of the $14 billion (euro10.22 billion) planned for 2007 in the second half of this year.
The GE unit supplied plastic resins to the automotive, health care and consumer electronics industries. It been weighed down by the rising costs of natural gas and raw materials since 2004. Profits for the division fell by 22 percent to $674 million in 2006.
SABIC intends to expand the business globally and is not planning to cut jobs, company officials said.
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