Alexa
  • Directory of Taiwan

GE closes on $11.6 billion sale of plastics business to Saudi company

GE closes on $11.6 billion sale of plastics business to Saudi company

General Electric Co. closed an $11.6 billion (euro8.46 billion) sale of its plastics division on Friday, 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 (euro491.79 million) in 2006.
SABIC intends to expand the business globally and is not planning to cut jobs, company officials said.
The plastics division is a $6.6 billion (euro4.82 billion) global supplier of plastic resins used in automotive, health care, consumer electronics, transportation, building and construction, telecommunications, and optical media.
Based in Pittsfield, Massachusetts, it employs 10,300 people in 60 locations worldwide.
GE's plastics division dates to 1930, resulting directly from Thomas Edison's experiments with plastic filaments for light bulbs in the 1890s. It grew into a significant GE venture where Jeff Immelt, president and chief executive, began his GE career.
The division has struggled since 2004 due to rising costs of natural gas and raw materials such as benzene. Profits for the division fell by 22 percent in 2006, to $674 million.
___
On the Web:
http://www.ge.com


Updated : 2021-06-15 05:39 GMT+08:00