GE Rumored To Divest Security Unit
Austin, Texas-based GE Security could fetch as much as $2 billion, according to reports.
August 28, 2009
General Electric Company is rumored to be seeking a buyer for the multinational conglomerate’s security systems manufacturing unit. The unit, GE Security Inc., based in Austin, Texas, is a surveillance cameras and alarms maker. The spin-off may be worth as much as $2 billion, according to Bloomberg.
The news service reported that competitors Tyco International Ltd. and United Technologies Corp. may be potential buyers of the asset. In mid August, a Citi analyst report obtained from ThomsonOne Analytics observed that – considering the volatility of Tyco Electrical & Metal Products – the industrial company’s electrical and metals group would be the most likely unit for Tyco to divest. If Tyco did decide to divest its electrical and metals group, it could use the capital to purchase the GE business unit.
Earlier this year, analysts speculated that General Electric could be forced to divest its GE Capital unit as a result of regulation under consideration at the time would have restricted industrial companies from owning financial businesses. In June, Bank of America Merrill Lynch analyst John G. Inch and Elana Hordon Wood noted that the possibility of a GE Capital spin-off seemed increasingly unlikely.
Earlier this month, MSNBC, a publishing venture owned jointly by GE-owned NBC Universal Inc. and Microsoft Corp., bought Everyblock, a Chicago-based local news aggregator.
In July, Regency Centers Corp., a subsidiary of GE Capital acquired a 10% stake in Macquarie CountryWide Trust’s US shopping malls portfolio.
The security sector has seen significant activity over the past year, despite discussions of defense spending reductions. Last week, San Diego-based Kratos Defense & Security Solutions Inc. put its Southeast Public Safety and Security Segment unit on the block. In June, Chicago, Illinois-based GTCR purchased Harding Security Associates, Inc. as the first acquisition in its partnership with Robert Coleman that was launched in April.
Calls placed to GE were not returned buy press time. GE stock traded at $14.06 per share as of midday Friday.
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