GE to Exit Appliance Business
The Associated Press
May 16, 2008
CBNNews.com - FAIRFIELD, Conn. -- General Electric Co. said Friday it plans to sell or spin-off its century-old appliance business.
The Fairfield, Conn., industrial conglomerate said in a statement the move is part of an ongoing plan to exit "slower growth and more volatile businesses."
The company is planning a strategic review that could result in an outright sale, a strategic partnership or a spin-off to shareholders.
The Louisville, Ky.-based business, which makes refrigerators, air conditioners and ovens, generates most of its revenue in the U.S., leaving its results dependent on "the rise and fall of a single market," GE said.
Analysts estimate sales in the appliance business, which posted revenue of $7 billion last year, are likely to decline between 10 percent and 12 percent this year. That stems from weak consumer spending and a drop in home improvement sales and residential construction.
Some have suggested a sale price in the low- to mid-$6 billion range.
GE shares rose 10 cents to $32.47 in premarket trading from a $32.37 close Thursday. The stock had its worst day in decades last month after the company reported a smaller-than-expected first-quarter profit and lowered its outlook for the full year.
That led to pressure to ramp up the pace of asset sales, with the appliance business and the NBC Universal media business among the top targets of speculation.
© 2008 The Associated Press. All rights reserved.
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