The diversified conglomerate has recently contacted private equity
firms and other parties to gauge their interest in buying its Wayne
subsidiary, part of GE Energy, the people said.
Credit Suisse Group is advising GE on the process, the people said,
asking not to be named because the sale plans are confidential.
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 years.
The Wayne unit, based in Austin, Texas, manufacturers fuel
dispensers for petroleum retailers and commercial fleets as well as
compressed natural gas equipment.
Representatives for GE and Credit Suisse declined to comment.
Generally, GE is investing more in its energy businesses as the
conglomerate 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.
In a sign of its focus on the oil and gas sector, GE last year
bought oilfield pump maker Lufkin for about $3 billion. Earlier this
week, GE Chief Executive Officer Jeff Immelt announced plans for the
company to spend an additional $10 billion through 2020 to boost
research on complex energy projects.
GE's oil and gas segment posted an 11 percent increase in revenue
last year to nearly $17 billion, while the segment's profit rose 13
percent to $2.2 billion.
The investment in its energy businesses is part of GE's overall
increasing focus on its industrial businesses as it reduces exposure
to the financial sector.
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To slim down its GE Capital division, the company is expected by the
end of next month to file for an initial public offering for up to
20 percent of its North American retail finance business, part of a
two-stage process to split off the business.
GE's planned divestiture of Wayne is yet another example of
diversified conglomerates trying to sell off non-core assets in an
effort to focus on key areas and deploy capital elsewhere.
Private equity, meanwhile, has shown a strong appetite for units
being carved out of companies, seeking to avoid frothy auctions for
publicly listed companies as markets rallied.
Earlier this month, Illinois Tool Works Inc <ITW.N> agreed to sell
its industrial packaging unit to private equity firm Carlyle Group
LP <CG.O> for $3.2 billion.
Another buyout firm, Clayton, Dubilier & Rice, struck a $1.8 billion
deal to buy the water technology unit of U.S. chemical manufacturer
Ashland Inc <ASH.N> last week.
(Reporting by Soyoung Kim in New York,
additional reporting by Greg Roumeliotis; Editing by Phil Berlowitz)
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