GE makeover con­tin­ues with $12-bil­lion sale

Los Angeles Times - - BUSINESS BEAT -

Gen­eral Elec­tric will sell its pri­vate eq­uity busi­ness in a deal val­ued at about $12 bil­lion as it re­fo­cuses on its core busi­nesses and ex­its a bank­ing sec­tor now un­der stricter over­sight.

The U.S. Spon­sor Fi­nance busi­ness, which in­cludes Antares Cap­i­tal, GE Cap­i­tal’s lend­ing busi­ness to pri­vate eq­uity-backed mid­dle mar­ket com­pa­nies, will be sold to the Canada Pen­sion Plan In­vest­ment Board, along with a $3-bil­lion bank loan port­fo­lio.

GE is look­ing to sell most of the as­sets of GE Cap­i­tal over the next 18 months, but it plans to keep the fi­nanc­ing com­po­nents that re­late to its industrial busi­nesses. The Fair­field, Conn., com­pany is trans­form­ing it­self back into an industrial con­glom­er­ate that makes large, com­pli­cated equip­ment for other busi­nesses.

In­vestors had long pushed for GE to get rid of its fi­nance unit, though it had been ex­tremely prof­itable, as fed­eral reg­u­la­tions and tough mar­ket con­di­tions made it less lu­cra­tive and at times, more risky.

GE spun off its con­sumer credit card busi­ness, Syn­chrony Fi­nan­cial, into a sep­a­rate pub­licly traded com­pany in July.

It sold a 51% stake of NBC Uni­ver­sal to Com­cast Corp. for $13.75 bil­lion in 2011. Two years later, Com­cast bought GE’s re­main­ing 49% stake in NBC Uni­ver­sal for $16.7 bil­lion.

Gen­eral Elec­tric spun off its in­sur­ance busi­ness into a sep­a­rate pub­licly traded com­pany, Gen­worth Fi­nan­cial Inc., in 2004. It sold its rein­sur­ance busi­ness to Swiss Rein­sur­ance Co. in 2006, and a year later sold its plas­tics busi­ness to Saudi Ba­sic In­dus­tries Corp.

GE sold its ad­vanced ma­te­ri­als unit to pri­vate in­vest­ment group Apollo Man­age­ment for $3.8 bil­lion in 2006 and its se­cu­rity busi­ness to United Tech­nolo­gies for $1.82 bil­lion in 2010.

GE Cap­i­tal said Tues­day that it is on pace to ex­e­cute sales of $100 bil­lion by the end of the year.

Shares of Gen­eral Elec­tric rose 9 cents, or 0.3%, to $27.33.

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