In a smart move that could result in strengthening its business competitiveness, General Electric Company (NYSE:GE) has unveiled its ambition plan to shed its entire property portfolio, encompassing commercial loans, factories and apartment complexes. The massive deal worth nearly $30 billion perceived to be the biggest of such a kind since 2007 will benefit the US-based Wells Fargo and Blackstone, a private equity firm and a leading bank respectively.
Following the GE’s decision to enhance investor returns, the stock prices of the company went upwards by 10.8%.
General Electric Company (NYSE:GE) has been consistently treading the path of offloading its stake in finance units across the globe, and the slide began when its appliance unit was sold to Swedish conglomerate Electrolux last year.
At one point of time, GE rode on the popularity of its finance unit, GE Capital, until after the firm’s earnings were eroded on the backdrop of the fall of Lehman Bros. in 2008.
Stock Market experts reckon that the latest decision of GE will yield positive results and help the former in getting rid of the image of being a Systematically Important Financial Institution. In reality, the exalted status worked against the business interests of GE as it increasingly came under the purview of government’s scrutiny.
GE, the most reputed company in the U.S, reckons that disowning the bulk of GE Capital would fetch large benefits for its shareholders. The company believes that it would be in a position to muster $90 million through selling stock buyback, special dividends and financial moves thereby paying back to the investors.
In the face of gripping financial crisis, the multinational conglomerate will take other major steps; including pulling back nearly $36 billion in cash that presently resides abroad.
It has been a steep fall for GE ever since the financial meltdown witnessed in 2008 and has been selling assets at regular intervals.
General Electric Company (NYSE:GE) has a strong workforce of 305,000 with its presence spanning across 175 countries.