Last Updated: Monday, 21 May 2007
GE in $11.6bn Saudi plastics sale
[Mr Immelt says the sale will boost GE's long-term growth prospects]
General Electric (GE) is to sell its plastics arm to a leading Saudi Arabian firm for $11.6bn (£5.8bn).
The deal with Saudi Basic Industries Corporation, one of the world's largest petrochemical firms, is the latest in a series of transactions by GE.
The US technology and finance giant has offloaded a number of manufacturing units to focus on faster-growing areas.
More than 10,000 GE staff will transfer to the Saudi firm once the deal is completed, expected later this year.
GE's shares rose slightly in early trading in New York after the deal was announced.
GE Plastics supplies plastic resins to the automotive, electronics, packaging and construction sectors, generating annual sales of about $6.6bn.
[This transaction will transform the plastics industry
Jeff Immelt, GE chief executive]
[Check GE shares]
GE said the deal, which is subject to regulatory approval, represented a fair price and that the business as a whole would benefit from a stronger relationship with Saudi Arabia.
"This sale is the right move at the right time for GE shareholders," said its chief executive Jeff Immelt.
"This transaction will transform the plastics industry by combining SABIC's low-cost materials position and global reach with GE Plastics' strong marketing and technology capabilities."
SABIC said the acquisition would give it access to 30,000 new customers across a range of different markets.
"This acquisition represents another step in SABIC's growth and diversification to become one of the world's leading manufacturing companies," said Mohammed Al-Mady, its vice chairman.
GE will spend the proceeds of the deal on increasing the amount of shares it is currently buying back to up to $8bn, as well as funding further restructuring of the business.
SABIC, the largest company in the Middle East by stock market value, manufactures polymers, methanol and fertilizer among other products.