Monday, April 28, 2008

General Electric hives off Plastic coat…

General Electric the world’s No. 2 company, with a market value of $380.25 billion (behind Exxon Mobil) has transformed its business portfolio through smart disposition and investment in higher growth, higher technology businesses. It has signed a definitive agreement to sell GE Plastics, a $6.645 billion global supplier of plastic resins, to Saudi Basic Industries Corporation (SABIC) – one of the world’s 10 largest petrochemicals manufacturers ranked by market capitalization (currently US$80 billion). The deal, which is also is the largest acquisition ever made by a Gulf investor, is expected to close in the third quarter subject to customary conditions and receipt of regulatory approvals. The transaction valued at $11.6 billion will be in all cash plus assumption of liabilities; and is bound to transform the plastic industry as it combines SABIC’s low cost material position and GE Plastic’s strong marketing and technological capabilities. The proceeds of the transaction will be used to fund the stock buyback and to strengthen GE through restructuring.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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