GE, Abu Dhabi firm in $8 bln joint venture

By Scott Malone

BOSTON (Reuters) - Conglomerate General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) and Abu Dhabi investment agency Mubadala Development Co said on Tuesday they have entered into an $8 billion joint venture that will initially focus on providing commercial finance in the Middle East and Africa.

The two companies said they also plan on working together in the clean energy and water, aviation, and oil and gas sectors.

The action reflects GE's strategy of shifting its financial operations away from volatile segments such as those influenced by U.S. consumer spending toward areas of higher growth.

Shares of the second-largest U.S. company by market capitalization have been battered this year because of concerns about its consumer and commercial finance units.

"What it allows us to do is get good geographic and asset spread of risk, but more importantly it allows us to reallocate to higher-return opportunities in commercial finance," Jeff Immelt, chief executive of GE, said on a conference call with reporters.

Over the next 18 months the companies plan to invest about $40 billion in commercial and infrastructure projects in the region, GE's fastest-growing market.

PLANS FOR TOP-10 STAKE

The companies said Mubadala "plans over time" to become one of GE's 10-largest shareholders by acquiring shares in the open market.