Hartford: General Electric completed a $11.6 billion sale of its plastics division on Friday, and plans to use the proceeds to help pay for a stock buyback programme.
The sale to petrochemicals manufacturer Saudi Basic Industries Corp (Sabic) is part of the US conglomerate's strategy of selling slower growth and volatile businesses such as insurance and invest in high-growth, high-technology businesses, such as health care and water processing technology.
The deal is expected to create a net gain, after taxes, of $1.5 billion. GE will use the proceeds to complete its current $27 billion stock buyback programme, with $12 billion of the $14 billion planned for 2007 in the second half of this year.
The plastics unit is a $6.6 billion global supplier of plastic resins used in automotive, health care, consumer electronics, transportation, building and construction, telecommunications, and optical media.
Its results have been weighed down by the rising costs of natural gas and raw materials since 2004. Profits for the division fell by 22 per cent to $674 million in 2006.
Source: Gulfnews
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