GE Explores IPO and Hybrid Deals in Strategic Review

General Electric Co. (NYSE: GE) is exploring a public offering for one its divisions and discussing hybrid deals with public companies to combine assets, reported the Wall Street Journal, citing sources familiar with the matter.

Instead of selling off its assets, the hybrid deals would leave GE shareholders with stakes in multiple public companies. The possibilities include spinning off a division to investors or combining a division with a smaller public company to avoid a big tax bill.

The move would allow businesses and its shareholders for a chance at a turnaround instead of selling at risky times.

The report comes shortly after Reuters reported last month that GE was considering a possible spin-off of its transportation division rather than a sale. GE’s transportation segment reported sales of $4.18 billion in 2017.

GE’s potential sale of its transportation business isn’t the only asset the company has explored into to. In October, GE’s Chief Executive John Flannery expected to sell $20 billion worth of assets, but has only sold approximately $4 billion.

GE explored the option of selling its railroad business to generate some cash on hand. GE also sold some assets in its healthcare segment to Veritas Capital earlier in April for $1.05 billion. The company’s lighting division has been on sale for over a year now and looking to sell its aviation and power segment.

Flannery said back in October that the company has “a number of other businesses which drain investment and management resources without the prospects for a substantial reward.”

Rather than divesting the entire business division, GE is considering deals that allow the segment to build a bigger business that are better positioned, said the sources. The sources reference the merger of its oil & gas division with Baker Hughes in July 2017 and the DowDuPont deal that combined two firms with plans to split into three companies.

GE is also reviewing its financial service segment, GE Capital. The company sold most of the unit back in 2015, but is now further paring the finance business or even considering selling the entire business, said the sources.

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