GE to sell plastics business to SABIC for $11.6 billion

Our Corporate Bureau
22 May 2007

Mumbai: General Electric Co. has agreed to sell its struggling GE Plastics business to petrochemicals manufacturer Saudi Basic Industries Corp. (SABIC) in an $11.6 billion all-cash deal.

Fairfield, Connecticut-based GE said it would receive net after-tax proceeds of about $9 billion, which would primarily be put toward the company's current stock buyback.

"This transaction is another important step in the execution of this strategy, which has created a faster-growing, higher-returning set of businesses capable of delivering sustained performance," GE chairman and chief executive Jeff Immelt said in a statement.

GE had put its plastics business up for sale after starting the year by negotiating $15 billion in takeovers, including parts of health-care company Abbott Laboratories Inc., the aerospace business of Britain's Smiths Group Plc and privately held oil and gas field equipment maker Vetco Gray.

Riyadh-based chemicals company, Saudi Basic Industries Corp (SABIC) said it intends to grow the business globally, and is not planning work force reductions.

"This business is complementary to our existing business without any overlaps," said Mohamed Al-Mady, vice chairman and chief executive of the petrochemicals manufacturer.