GE to sell arms for $3.8bn

NEW YORK: General Electric said on Thursday that it had agreed to sell its advanced materials business, which includes silicones and quartz, to private equity firm Apollo Management LP for about $3.8bn in cash and securities.

GE said the sale includes the stakes of its joint venture partners in GE Toshiba Silicones and GE Bayer Silicones, which it had purchased and sold to Apollo. Separately, Germany’s Bayer said it had sold its 49.9% stake to GE for e475m ($603m).

GE said it will have a 10% stake in the new company and also have $400m in notes.

GE said it would have net proceeds from the deal of about $2bn after the purchase of these stakes, taxes and deal expenses. It plans to use the proceeds to fund growth and restructuring in its industrial businesses. GE expects the deal to close before the end of ’06.

It said the advanced materials business, based in Wilton, Connecticut, supplies silicone-based products, silanes, sealants, urethane additives and adhesives; and fused quartz and ceramics materials.

Wayne Hewett, who currently leads the business, will become president and CEO of the new company.