FAIRFIELD, Conn. (Sept. 14) — General Electric today announced that it has signed a definitive agreement to sell GE Advanced Materials — which includes its silicones and quartz businesses — to Apollo Management L.P.
The sale to the private investment firm is valued at about $3.8 billion in cash and securities. Upon completion of the transaction, GE will receive a 10-percent ownership stake in the new company and hold $400 million of notes.
GE also announced it has reached definitive agreements with Toshiba and Bayer to acquire 100 percent of their respective equity stakes in two major Advanced Materials joint ventures — GE Toshiba Silicones, formed in 1971, and GE Bayer Silicones, formed in 1998.
Those two wholly-owned ventures will be included in the acquisition by Apollo.
GE will receive net proceeds from the deal of approximately $2 billion after the purchase of minority partners´ interest, taxes and deal expenses. The effect on operations will be modest and will be principally offset by restructuring, GE said.
The closing of the Apollo transaction is subject to customary conditions, including the receipt of regulatory approvals, and is expected to occur before the end of 2006.
Wayne Hewett, who currently leads the Advanced Materials business for GE, will serve as president and CEO of the new business, which will be renamed upon completion of the transaction.
GE Advanced Materials has annual revenues of about $2.5 billion, and supplies silicone-based products, silanes, sealants, urethane additives and adhesives, as well as high-purity fused quartz and ceramics materials.
The business is headquartered in Wilton, Conn. and employs 5,000 people in 38 locations worldwide.