GE sells 60 per cent stake in GECIS

Our Corporate Bureau
09 November 2004

New Delhi: General Electric yesterday announced its decision to offload 60 per cent stake in its BPO operation — GE Capital International Services (GECIS) — to leading private investment firms General Atlantic Partners and Oak Hill Capital Partners for about $500 million.

"We are a technology company. GE wants to put its energies, the corporate resources and the investments into its technology business and as we saw the opportunity for GECIS to grow, it did not fit with our strategy. It is a very strategic decision," Scott R. Bayman, president and CEO - India of GE, said while announcing the biggest deal in BPO segment here.

GECIS, which until now was a wholly-owned subsidiary of GE, will become an independent company and will aggressively target third-party customers. The company has been going to the external market in the last six months although its non-GE revenues still constitute a small percentage of the overall revenues. The announcement, which follows months of intense speculation on the divestment plans by GE, values GECIS at $800 million.

GE would retain 40 per cent stake in GECIS with board representation, and the entire transaction is expected to be completed in the next six months. Both General Atlantic Partners and Oak Hill will hold 30 per cent stake each in GECIS and have a majority representation on the board.

GECIS will continue to serve GE under a multi-year contract. About 1,000 GECIS employees will also remain with GE.