General Electric Company (GE) Close To Selling $30 Billion of Real-Estate Holdings to Blackstone Group LP and Wells Fargo & Co
General Electric Company (NYSE:GE) is planning to sell most of its real-estate holdings, worth about $30 billion. The company’s move was part of a bigger plan to split the unit from a large financial unit, which drove profits. However, investors were not only rattled with concerns but also worried about the risks perception, especially after the financial crisis struck badly in 2008.
As part of the move, General Electric Company (NYSE:GE) is said to be holding discussions with a number of companies and private equity firms. This includes Blackstone Group LP (NYSE:BX), as well as Wells Fargo & Co (NYSE:WFC), to divest a portfolio worth about $26 billion. The portfolio is related to investments in shopping malls, commercial property spread throughout the world, and office buildings.
The business conglomerate is expected to announce the deal any time. Reports indicate that the company’s top management came to witness the mass $500 billion lending operation as severable. The company preferred to adopt the route it exercised last year, in respect of its appliances unit that was sold to Electrolux AB.
However, General Electric Company (NYSE:GE) seems to be clear on its thought of holding back units such as energy, health-care financing, and aircraft leasing, which help its industrial operations. In a tactical, but significant, move, its executives want to keep large units, such as commercial lending, as dispensable in case it gets the pricing correct, besides the regulators clearance.
Focus On Industries
The business conglomerate appeared to be under pressure to project the company as a firm with a focus on industries. This is expected to win back the investors’ confidence, who were not happy with the stock price of less than $30 after the financial imbroglio in 2008. Its CEO, Jeff Immelt, seems to be getting more stick from the shareholders, retirees, and his own executives for the weak performance of the stock. He has been with the company for more than a decade.
General Electric Company (NYSE:GE)’s move to divest the real estate business has come at an appropriate time as the sector is gaining popularity with investors. Markets have also recovered, with prices reaching all-time highs in some part of the United States.
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