GE plastics had sales of $6.6 billion (about 7% of GE's industrial revenues) in 2006 and a segment operating profit margin of 10.1%.
The sale is consistent with GE's ongoing strategy of focusing on business segments with solid growth prospects. This strategy has resulted in both acquisitions and divestitures. Given the company's strong free cash flow generation prospects, including its guidance of approximately $24 billion in cash flows from operating activities in 2007; and commitment to maintaining the highest degree of credit quality, we do not expect that the ongoing implementation of management's business strategies, including acquisitions and share repurchases, will have a meaningful impact on GE's creditworthiness. Although large acquisitions could temporarily affect the company's credit profile, we continue to expect that large acquisitions or a series of substantial transactions would be structured to preserve financial flexibility. We continue to monitor the challenge of maintaining a balance between capital resources at GECC and at the parent GE level.
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GE's sale of its plastics business to Saudi Basic Industries Corp. does not affect ratings
- Saudi Arabia: Thursday, May 24 - 2007 at 08:55
- PRESS RELEASE
Standard & Poor's Ratings Services said that General Electric Co.'s (GE; AAA/Stable/A-1+) announcement that it is selling its plastics business to Saudi Arabia-based petrochemicals producer Saudi Basic Industries Corp. (SABIC; A+/Stable/A-1) for a total consideration of USD11.6 billion has no impact on our ratings or outlook on GE.
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Posted by Lara Lynn Golden, News EditorThursday, May 24 - 2007 at 08:55 UAE local time (GMT+4)
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