Summary
General Electric Company (GE) has announced a significant divestiture, agreeing to sell its GE Plastics business to Saudi Basic Industries Corporation (SABIC) for $11.6 billion in cash, plus the assumption of liabilities. GE Plastics is a substantial global supplier with $6.645 billion in annual sales, serving a wide range of industries including automotive, healthcare, and consumer electronics. This strategic move is expected to generate approximately $9 billion in net after-tax proceeds for GE. The company plans to utilize these funds primarily to enhance its ongoing stock buyback program, increasing the planned repurchases for 2007 from $6 billion to a range of $7 billion to $8 billion. Additionally, the sale is projected to result in an approximate after-tax gain of $1.5 billion, which will be allocated towards funding restructuring efforts across GE's various business segments and further supporting the share repurchase initiative.
Key Highlights
- 1GE has entered into a definitive agreement to sell its GE Plastics business to SABIC.
- 2The total transaction value is $11.6 billion in cash, plus the assumption of liabilities.
- 3GE Plastics is a significant global business with annual sales of $6.645 billion.
- 4The sale is expected to generate approximately $9 billion in net after-tax proceeds for GE.
- 5Proceeds will be used primarily to boost the 2007 stock buyback program, increasing it to $7-$8 billion from $6 billion.
- 6The transaction is anticipated to yield an approximate after-tax gain of $1.5 billion.
- 7The after-tax gain will fund business restructuring and support share repurchases.
- 8The deal is targeted to close in the third quarter of 2007, subject to regulatory approvals.