GE Plastics could sell for over $10bn – analysts

09 January 2007 15:34  [Source: ICIS news]

TORONTO (ICIS news)--General Electric (GE) should be able to sell its GE Plastics business for $10.0bn (€7.7bn), if not more, as the business is very attractive to strategic investors, analysts at Citigroup and Standard & Poor’s said on Tuesday.

Interested bidders could include Dow Chemical, BASF and Saudi Arabia's SABIC, Citigroup said. SABIC is an interesting possibility given its access to very inexpensive feedstocks, which are central to the cost structure of the plastics business, the analysts added.

The analysts were commenting on Wall Street speculation that GE was planning to sell its plastics unit.

They based their estimates for the possible GE Plastics sales price on the recent disposal by GE of its advanced materials business.

“We believe the asking price could offer potential bidders attractive returns, would not be surprised to see the sale price rise above this level,” Citigroup said.

Citigroup estimates GE Plastic’s sales for 2006 at $6.7bn, with operating profits of about $738m.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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