GE plans to sell its plastics unit, say reports
By Our Corporate Bureau | 10 Jan 2007
Mumbai: General Electric Company (GE), which is trying to cut costs, is seeking to sell its plastics business, which is valued at about $10 billion, a report on the The Wall Street Journal's web site said.
Reports also said that GE has apprehensions about the ability of private-equity firms to team up for the acquisition. "GE told private equity firms that they face restrictions on their ability to team up with other private-equity bidders," the report cited sources as saying.
Goldman Sachs, acting on behalf of GE, has, meanwhile, contacted potential plastics-industry bidders, the report said.
Goldman Sachs had contacted at least four groups, including Apollo Management, Bain Capital, the Blackstone Group and Kohlberg Kravis Roberts & Co.
GE vice chairman, and president and chief executive of GE industrial unit, Lloyd Trotter, had told investors late last year that one of his priorities would be to cut costs at the plastics unit.
The plastics business faced margin pressure in 2006 as a result of the rising price of benzene, a key raw material.
GE and Goldman Sachs, however, declined to comment. And while the exact nature of the restrictions equity firms face in dealing with GE is not known, firms that were contacted declined to call other firms about teaming up, the report added.
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