8-KOther Events

GENERAL ELECTRIC CO 8-K Report (Nov 19, 2003)

Filed November 19, 2003For Securities:GE

Summary

General Electric Company (GE) announced its intention to pursue an Initial Public Offering (IPO) for a newly formed entity named Genworth Financial, Inc. This new company will encompass the majority of GE's life and mortgage insurance operations. GE plans to file the necessary registration statement in early 2004, with the IPO completion anticipated in the first half of the same year, contingent on market conditions and regulatory approvals. GE intends to divest approximately 70% of Genworth's equity over the next three years, aiming to transform it into a fully independent company. The proceeds from the IPO are earmarked for strategic growth initiatives and for reducing 'parent-support debt' within GE Capital. This move aligns with GE's previously stated strategy to significantly decrease its exposure to insurance-related assets, reducing them from roughly 40% to about 15% of its total financial services assets.

Key Highlights

  • 1GE plans an IPO for its life and mortgage insurance operations under a new entity, Genworth Financial, Inc.
  • 2The IPO is expected to be filed in early 2004 and completed in the first half of 2004, subject to market conditions and approvals.
  • 3GE will initially sell about 30% of Genworth's equity, with plans to reduce its ownership to zero over three years.
  • 4Proceeds from the IPO will be used for growth investments and to pay down debt at GE Capital.
  • 5The businesses being spun off represent approximately 20% of GE's financial services assets and half of its Insurance segment's assets.
  • 6Genworth will assume certain obligations, including GEFAHI's yen-denominated notes, while GE Capital will guarantee GEFAHI's commercial paper program during the transition.
  • 7GE will retain certain consumer marketing, financing operations, and some run-off insurance blocks, but not Employers Reinsurance Corporation.

Frequently Asked Questions

Genworth Financial, Inc. is a new company being formed to include most of GE's life and mortgage insurance operations. GE is spinning off Genworth as part of its strategic plan to reduce its exposure to insurance-related assets, aiming to shift its focus to other core business areas.

GE expects to file the IPO registration statement in the first half of January 2004 and complete the IPO in the first half of 2004, subject to market conditions and regulatory approvals. Initially, GE plans to sell approximately 30% of Genworth's equity and aims to exit its ownership completely over the subsequent three years.

GE intends to use the proceeds generated from the IPO to invest in growth initiatives across its businesses and to reduce 'parent-support debt' within GE Capital.

No, not all of GE's insurance businesses will be part of Genworth. Genworth will comprise most of the life and mortgage insurance operations, including international mortgage insurance and European payment protection businesses. GE will retain certain consumer marketing and financing operations, some U.K. insurance, and certain run-off blocks. Employers Reinsurance Corporation, another principal insurance business, will not be included in the IPO.