General Electric Co. (GE), moving toward an initial public offering of its consumer-lending unit, is open to another “staged exit” as it weighs the disposal of more than $4 billion in assets this year.
“I wouldn’t be surprised to see that take place again,” Chief Executive Officer Jeffrey Immelt said at an investor conference today, without specifying what GE might do. “Staged exit” is the wording GE has adopted in describing the planned spinoff of the GE Capital operation that offers credit cards in North America.
Immelt’s comments signaled that Fairfield, Connecticut-based GE might opt for something other than a straightforward sale for the businesses being unloaded in 2014. GE has been selling real estate assets and stakes in foreign banks under the CEO’s plan to shrink GE Capital and expand industrial units.
“We think there’s more value creation as you go along and we want to participate in some of that,” he said at the Electrical Products Group conference in Longboat Key, Florida. The company will pursue divestitures when “it makes sense strategically and financially,” Immelt said.
GE is “on track” to spin off its consumer-lending unit, known as Synchrony Financial, through an IPO in the third quarter, he said. The business provides store credit cards for retailers such as Wal-Mart Stores Inc. (WMT) and J.C. Penney Co. GE has said it will sell about 20 percent of Synchrony in the offering and distribute the remaining stock to shareholders next year.
Immelt reaffirmed the company’s plan for $4 billion in industrial divestitures this year, including a deal this month to sell fuel dispenser maker Wayne to Riverstone Holdings LLC.
A staged exit could take other forms, including a joint venture, as GE did when it sold NBC Universal in a multistage process.
Seth Martin, a GE spokesman, declined to comment on the company’s divestiture plans.
Immelt has been expanding the GE businesses that manufacture jet engines, gas turbines and oilfield equipment. The company agreed to pay $17 billion for the energy units of French industrial company Alstom SA. (ALO)
GE rose 0.7 percent to $26.49 at the close in New York.
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