GE completes $11.6 bln plastics unit sale to SABIC
NEW YORK, Aug 31 (Reuters) – General Electric Co (GE.N: Quote, Profile, Research) said on Friday it completed the sale of its plastics business to chemicals manufacturer Saudi Basic Industries Corp (SABIC) (2010.SE: Quote, Profile, Research) for about $11.6 billion in cash.
GE will use the proceeds to complete its current $27 billion stock buyback program, with $12 billion of the $14 billion planned for 2007 coming in the second half of this year.
The sale is part of GE’s strategy of focusing on higher-growth, higher-return technology businesses.
In 2006, GE Plastics profit fell 22 percent to $674 million, on slightly higher revenue of $6.65 billion.
The plastics business is headquartered in Pittsfield, Massachusetts, and employs 10,300 people in 60 locations worldwide.
Fairfield, Connecticut-based GE in January placed the plastics unit on the block, after facing several years of margin pressure.
Since 2002, GE has sold off businesses with more than $50 billion in revenue, according to data provider Dealogic.
GE has also made major acquisitions this year, including the aerospace business of Britain’s Smiths Group PLC (SMIN.L: Quote, Profile, Research) for $4.8 billion and privately held oil and gas fields equipment maker Vetco Gray for $1.9 billion.