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[Oct 2006]
GE Sells GE Advanced Materials
GE (Fairfield, CT, USA) has signed a definitive agreement to sell GE Advanced Materials (Silicones & Quartz) to Apollo Management LP, a private investment firm in a deal valued at approximately US$3.8 billion in cash and securities. Upon completion of the transaction, GE will receive a 10% ownership stake in the new company and hold US$400 million of notes. The closing of the transaction is subject to customary conditions, including the receipt of regulatory approvals and is expected to occur before the end of 2006.
"Today's announcement is another big step in repositioning the Industrial segment for faster growth and higher returns," said Lloyd Trotter, GE Vice Chairman and President and CEO of GE Industrial. "We negotiated an attractive price for the deal, and we will use the proceeds to fund growth and restructuring in our industrial businesses."
"Advanced Materials is a global leader in a wide range of high-technology materials solutions," said Joshua Harris, a founding partner of Apollo. "It has a world class management team, a robust technology portfolio and strong research and development. This combination makes it an extremely valuable asset and gives Apollo a solid foundation to profitably grow this business and create long-term value."
GE Advanced Materials is a US$2.5 billion supplier of silicone-based products, silanes, sealants, urethane additives and adhesives; and high-purity fused quartz and ceramics materials. It is headquartered in Wilton, CT, USA and employs 5,000 people in 38 locations world-wide.
GE Advanced Materials has two major joint ventures - GE Toshiba Silicones (GETOS), formed in 1971, and GE Bayer Silicones (GEBS), formed in 1998. In two related transactions, GE announced that it has reached definitive agreements with Toshiba and Bayer to acquire 100% of their respective joint venture equity stakes. GETOS and GEBS will become wholly owned by GE and will be included in the acquisition by Apollo.
GE will receive net proceeds from the deal of approximately US$2 billion after the purchase of minority partners' interest, taxes and deal expenses. The effect on operations will be modest and will be principally offset by restructuring.
Wayne Hewett, who currently leads the Advanced Materials business for GE, will serve as President and CEO of the new business, which will be renamed upon completion of the transaction.
"Wayne and his leadership team bring years of experience to their new roles and are highly respected in the industry," added Lloyd Trotter. "We wish them the very best of success in their new company and we look forward to working together as supply chain partners."
www.ge.com
ENDS