GE to spin off consumer unit
NEW HAVEN, CONNECTICUT - General Electric Co. said it is focusing on spinning off its entire consumer and industrial businesses, which include its iconic appliances and lighting products.
The announcement by the Fairfield.-based diversified conglomerate is the latest aggressive and symbolically significant move to shed slower growth businesses by one of the world's largest companies.
The unit has 50,000 of GE's 300,000 employees with sales of $13.3 billion (all figures US) and a profit of slightly more than $1 billion last year. GE Lighting invented the world's first incandescent light bulb in 1879.
GE announced in May that it planned to sell or spin off its appliance business, but now says it is looking to spin off the entire unit, which includes Energy Star household appliances such as dishwashers and clothes dryers as well as lighting, motors and electrical distribution.
GE continues to explore all options for the consumer and industrial operations, but believes it makes the most sense to spin off the entire unit to existing shareholders, keeping its leadership teams and employees intact. The company hopes to complete the move next year.
"As we explored our options for appliances, it became clear that the fastest, most efficient step we could take in completing the transformation of our industrial portfolio would be to focus on a possible spin-off of the entire unit," General Electric Co. Chairman and Chief Executive Jeff Immelt said in a statement. "This is consistent with the strategy we have been executing to transform the GE portfolio for long-term growth and makes sense for GE shareholders.''
The spinoff would create a separate publicly traded company owner by GE shareholders. Last year, Fairfield-based GE shed its underperforming plastics business by selling it to a Saudi Arabian company for $11.6 billion.
GE share traded at $27.29 July 10, up 10 cents and near the low end of its one-year range of $26.15 to $42.15.
The stock had its worst day in decades in April after the company reported a smaller-than-expected first-quarter profit and lowered its outlook for the full year.
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