Business
GE to Exit Most Finance as $26.5 Billion of Real Estate Sold
In this photo made Oct. 14, 2009, a General Electric (GE) microwave is shown at Best Buy in Mountain View, Calif. (AP Photo/Paul Sakuma, File)
(Bloomberg) – General Electric Co. plans to exit the bulk of its lending business, including a $26.5 billion sale of most of its real estate, as Chief Executive Officer Jeffrey Immelt refocuses the company on its industrial roots.
In the broadest restructuring since the GE Capital unit destabilized its parent during the 2008-09 financial crisis, GE plans to unload its middle-market lending business and consumer platforms while keeping only the operations that support its manufacturing arms. Potential buyers have made a “significant amount” of inquiries, GE Capital CEO Keith Sherin said.
The shares surged the most in almost five years on GE’s news, which included authorization of a stock buyback of as much as $50 billion. GE also said it’s working with U.S. regulators to get below the threshold to be designated a systemically important financial institution.
GE’s moves are an “overwhelming positive,” Steven Winoker, a Sanford C. Bernstein & Co. analyst who rates the shares as outperform, said in a note to clients. While Winoker said he was counting on GE to eventually divest more of GE Capital, “what we did not expect was the speed with which management would move to undertake this transformation.”
