(Adds dropped word "dispensers" in first paragraph)
By Greg Roumeliotis
May 2 General Electric Co is in advanced
talks to sell its energy unit that makes fuel dispensers to
First Reserve Corp, according to people familiar with the
matter, in the latest example of a conglomerate selling an
unloved business to a buyout firm.
A deal will likely value GE's unit, called Wayne, at between
$500 million and $600 million, the people said this week, asking
not to be identified because the talks are confidential. An
agreement has not yet been signed and negotiations could still
fall through, the people added.
GE and First Reserve declined to comment.
The Wayne unit, based in Austin, Texas, manufactures fuel
dispensers for petroleum retailers and commercial fleets as well
as compressed natural gas equipment.
Wayne was part of Dresser Inc, the energy infrastructure
company that GE bought in 2010 for $3 billion. That deal marked
its largest acquisition since the financial crisis and heralded
a series of takeovers by GE in the energy space in following
GE is investing more in its energy businesses as it seeks to
become a dominant supplier of equipment and services to oil,
natural gas and alternative power companies. However, the fuel
dispenser business is at the low-end of GE's energy offerings
and is not a core interest.
GE is currently trying to convince the French government to
back its $16.9 billion offer for engineering group Alstom SA's
power and energy arm, which would boost its position
in producing steam turbines for power stations and technology
for electricity grids.
Reuters first reported in February that GE had hired Credit
Suisse Group AG to sell Wayne.
Private equity has shown a strong appetite for non-core
units being carved out of companies, seeking to avoid frothy
auctions for publicly listed companies as markets rallied.
Earlier this week, for example, Illinois Tool Works Inc
completed the sale of its industrial packaging unit to
private equity firm Carlyle Group LP for $3.2 billion.
(Reporting by Greg Roumeliotis in New York; editing by Andrew