GE sells unit for $3.8 billion

Posted Sep 14th 2006 9:23AM by Howard Tsung
Filed under: Deals, Internet, Blogs, Competitive Strategy, General Electric (GE)

GE announced today the sale of its Advanced Materials Unit to private equity firm Apollo Management LP for $3.8 Billion. GE's Advanced Materials Unit specialized in producing specialized silicon and quartz based products.

After all is said and done, GE will see more than $2 billion in proceeds from the sale. GE is not in dire need of cash to cover losses or debt, so the sale is driven only in part by revenue generation. The other aspect of the sale, and likely the more important one, is that GE's management is beginning to acquiesce to pressure from shareholders and Wall Street (analysts) to consolidate its business lines.

Jack Welch, during the course of his 20-year reign, took GE from $12 billion to roughly $280 billion and along the way took GE from a core line of business to having part of an almost innumerable number of different businesses.

Since he stepped down in 2001 though, the company's share price has languished as management has not quite been able to fill the void of his departure (covered by Victoria Erhart). There has been an outcry that GE needs to shed its non-core businesses and focus on the basic three: Industrials, Entertainment, and Financials.

Though some clamor that GE should take a step further and split the company into the aforementioned components.

Tags: advanced materials, AdvancedMaterials, apollo, ge, spinoff

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Reader Comments (Page 1 of 1)

9-14-2006 @ 9:40PM

Frank Sullivan said...

The GE stock is just great with a great deal of potential for anyone who wants to investas distinguished from risks that brockers may be ,with analysts saying the stock is not where it should be .The qestion I have is where do these folks think it shoud be.
the PE is about right and Jeffry is doing great and will increase the dividend again