By Ted Mann and Michael Calia
General Electric Co. said Friday that it expects to raise $3.1
billion in the sale of a 15% stake in Synchrony Financial as the
conglomerate begins marketing the initial public offering of its
North American consumer-finance arm.
The company, which also reported a 13% increase in its
second-quarter profit, filed the so-called "red herring" prospectus
document with regulators Friday and will start meetings with
investors. The company is targeting the end of July for the listing
of the business.
The company set the expected price range of 125 million shares
at $23 to $26 each and said it would list on the New York Stock
Exchange under symbol SYF.
The IPO appears set to be the biggest debut by a U.S. company
this year so far, topping the $2.6 billion offering by Ally
Financial in April. The stake GE retains in the business will be
worth about $17 billion, valuing Synchrony at around $20
billion.
The sale of Synchrony is a crucial element of GE CEO Jeff
Immelt's strategy to lead the company away from its long reliance
on financial profits, and back toward its roots as one of the
country's oldest and strongest industrial manufacturers that makes
everything from jet engines to power turbines and locomotives.
Overall, GE said Friday that it is making "good progress" with
its goals for simplification.
GE has shed its NBCUniversal media unit and moved to build up
its energy and industrial portfolio. Last month, French engineering
company Alstom SE agreed to sell the biggest part of its
enterprise--its gas turbine business--to GE for $17 billion. The
deal if completed would be GE's biggest-ever acquisition.
At the same time, GE is stepping up efforts to sell its
low-margin appliance business, according to people familiar with
the matter, a business GE planned to sell in 2008 before the
financial crisis scared off buyers.
GE's industrial segment posted a 9% increase in profit during
the latest period, along with wider margins.
"The environment continues to be generally positive," Mr. Immelt
said.
Overall, GE posted earnings of $3.55 billion, or 35 cents a
share, up from $3.13 billion, or 31 cents a share, year earlier.
The company posted a $193 million provision for income taxes, down
from $310 million in the prior-year period, and it narrowed its
loss from discontinued operations to $41 million from $124
million.
Operating earnings rose to 39 cents a share from 36 cents a
share.
Revenue improved 3.4% to $36.23 billion.
Analysts polled by Thomson Reuters had expected per-share
operating earnings of 39 cents and revenue of $36.31 billion.
Write to Ted Mann at ted.mann@wsj.com
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