| NEW YORK, April 25
NEW YORK, April 25 The field of bidders for
General Electric Co.'s (GE.N) plastics division has narrowed as
the auction of the roughly $10 billion unit moves into the
second stage, sources familiar with the situation say.
Private equity firms Bain Capital, Kohlberg Kravis Roberts
& Co. [KKR.UL] and TPG [TPG.UL] are no longer involved in the
process, these sources told Reuters, with Carlyle Group's
Blackstone Group [BG.UL] remains in the bidding, separate
sources say. Apollo Management appears to have advanced to the
second round as well, sources say.
At least two corporate buyers -- Saudi Basic Industries
Corp. (SABIC) 2010.SE, the world's largest chemical firm by
market value, and Basell BASL.UL, the Dutch petro-chemical
maker -- are also expected to submit second-round offers for
the division, according to some of the sources.
It was unclear whether Koch Industries, the world's largest
private company, which Reuters previously reported had
partnered with Blackstone, was still in the running.
Sabic declined comment. Koch and Basell were not
immediately available for comment. All of the private equity
firms mentioned declined comment.
Fairfield, Connecticut-based GE put the plastics business
on the auction block in January.
GE's Chairman and Chief Executive Jeff Immelt said on
Wednesday that the effort to sell GE Plastics is on track and
the company expects a deal to close in the third quarter.
"Plastics looks good," Immelt said at GE's annual meeting
in Greenville, South Carolina. "We've had a lot of interest in
it. I'm pretty optimistic about how the whole process is going
and what the outcome will be.
"I think there will be a second-quarter announcement," he
added. "We'll probably close the deal in the third quarter. The
momentum is good."
The unit, which makes plastics for automotive parts,
computer enclosures, compact disks, telecoms equipment and
construction materials, faced margin pressure in 2006 as a
result of the rising price of benzene, a key raw material.
Analysts have said the plastics business could be worth
around $10 billion.
The auction, run by Goldman Sachs (GS.N), is unique in that
the bank prohibited the deal's four main bidders from teaming
up with each other. Teaming up among buyout firms has been a
common practice in the industry, and one that critics say
The four main bidders for GE Plastics were Apollo,
Blackstone, Carlyle and KKR, sources previously told Reuters in
March. The firms signed agreements promising not to team up
with each other, sources said, but were allowed to bring in
their own partners.
Carlyle linked up with TPG, KKR joined with Bain, and
Blackstone partnered with Koch Industries, sources said. To
read that story please click on [ID:nN06390325].
It remains unclear if Apollo has a partner. It is also
unclear whether Koch and Blackstone are still working together,
or whether Blackstone was bidding with another party.
(Additional reporting by Souhail Karam in Riyadh and Scott
Malone in Greenville)