GE Moves to Sell First Part of Lighting Business
February 15 2018 - 06:22PM
Dow Jones News
By Thomas Gryta
General Electric Co. reached a deal to sell parts of its
overseas lighting business to a former executive for an undisclosed
amount, the first move for the conglomerate to separate with one of
its oldest and most iconic businesses.
The deal includes GE Lighting in Europe, the Middle East, Africa
and Turkey, along with its Global Automotive Lighting businesses.
The buyer is a company controlled by Joerg Bauer, the former
president of GE Hungary, where the included lighting units are
based. The businesses will operate as the Tungsram Group and use
the GE brand for a transition period, according to a GE
spokeswoman.
The deal doesn't include the bulk of GE Lighting, including its
North America operations and its commercial LED lighting business,
which the company is still in the process of selling.
The sale, which GE has been weighing since early last year,
comes as the company is restructuring itself under CEO John
Flannery. Last fall, GE slashed its dividend and financial
projections and pledged to sell at least $20 billion in assets. The
process of selling the lighting business began under former CEO
Jeff Immelt, who retired last year.
While the lighting business is iconic for GE -- which was
co-founded by Thomas Edison -- the products have become
commoditized and profit margins are thin. Last year, the entire
division had revenue of about $2 billion with $93 million in
profit. GE's total revenue that year was $122.1 billion.
GE said the proposed sale is subject to signing local agreements
and is expected to close in phases by the end of June. The
operations include more than 4,000 employees, mostly based in
Hungary, and five manufacturing sites in that country.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
February 15, 2018 18:07 ET (23:07 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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