The GE Spin-Off You Never Heard Of

Although Genworth is a leading insurer, the unit's performance isn't good enough for GE. Will investors bite?

Provide news feedback or report an error

May 20, 2004 at 4:00 AM UTC

This article is for subscribers only.

It has a big-name parent in General Electric (GE ) and more than 10 times the earnings of Google, yet few are clamoring to get a piece of Genworth Financial when it goes public. In fact, the expected spin-off of 30% of GE's life and mortgage insurance business, now set for early in the week of May 24, may qualify as both one of the largest and quietest stock deals of the year. The $9.8 billion operation, which has more than 15 million customers and $100 billion in assets, could raise about $3.34 billion in the market.

The Connecticut conglomerate plans to start promoting Genworth in a series of print and broadcast ads next month, boasting that it's "built on GE heritage." But if that heritage is so strong, potential investors may wonder why it's being kicked out of the GE family. With interest rates rising and CEO Jeffrey R. Immelt promising to sell off another big chunk of GE's Genworth stake within the next three years, they may also worry about the health of their investment.