GE extends appliances divestment to entire consumer and industrial group

11 July 2008

Two months after having announced that itr would explore hiving-off its century old appliances busines, General Electric Co yesterday said that it would divest to shareholders its entire GE Consumer & Industrial group, which includes not only its appliances but its lighting business, the forerunner to which  was co founded Thomas Edison.

Under immense shareholder pressure over lower than expected results in April, GE chairman and CEO Jeff Immelt had announced on 16 May that a spin-off was one possible outcome of the strategic review of its appliances division.

Immelt said in Apriil that said GE may earn $2.20 to $2.30 a share, below the minimum of $2.42 he had earlier predicted and on the same day, GE reported a surprise decline in first-quarter profit, and shares fell the most since 1987.

Shareholders now want him to speed up divestitures and focus on businesses with better growth potential such as jet engines, energy and health care, to revive stock prices that  have lost a quarter of their value this year.

According to analysts estimates, a sale could fetch $3 billion to $8 billion.

Reports induicate that potential bidders for the appliance unit include Turkey's largest maker of household appliances Arcelik AS, Hong Kong-based Haier Electronics Group Co. and South Korea's LG Electronics Inc.