GE may sell some finance units
BOSTON (Reuters) - General Electric Co. (GE.N) may look to sell off some pieces of its Commercial Finance arm in the third quarter, company officials said on Friday.
The current flood of deal-making around the world -- on a record-setting pace at $2.8 trillion through the first half of 2007, according to Dealogic -- makes this a very appealing time to sell, the GE officials said.
"Are we going to be opportunistic about value-creation because of liquidity? I think it's a good time," Keith Sherin, GE's senior vice president and chief financial officer, said in a phone interview. "That'll be more in the financial services space today, where we may have things that are less strategic that someone else may be able to do more with."
The timing appears good to try to sell off pieces of that unit, said Matt Collins, capital goods analyst at Edward Jones in St. Louis, Missouri.
"The commercial finance side (move) is just opportunistic, taking advantage of a frothy market," Collins said.
GE Commercial Finance, which includes the conglomerate's real estate arm, finances capital purchases like medical equipment and industrial machinery. It was the company's second-most-profitable operation in the second quarter, with operating earnings up 18 percent to $1.25 billion.
The possibility that pieces of the unit might be sold was disclosed as the GE officials discussed second-quarter results in a conference call with investors.
GE's WMC Mortgage subprime lending unit, which the company has put up for sale, falls under the GE Money consumer finance arm.
Fairfield, Connecticut-based GE -- the world's second-largest company by market capitalization, behind Exxon Mobil Corp. (XOM.N) -- has been very active on the deal front this year, buying the aerospace unit of Britain's Smiths Group Plc (SMIN.L) for $4.8 billion and acquiring privately held oil and gas fields equipment maker Vetco Gray for $1.9 billion. It has also agreed to sell its plastics business to Saudi Basic Industries Corp. 2010.SE for $11.6 billion.
(Reporting by Scott Malone)
