Late on Friday, General Electric Co Inc revealed that it had been running with the hare and hunting with the hounds as it joined GEC Plc to announce that the two companies would combine their European interests in consumer products, medical equipment and some electrical distribution equipment, and would co-operate in power systems. GE has […]
Late on Friday, General Electric Co Inc revealed that it had been running with the hare and hunting with the hounds as it joined GEC Plc to announce that the two companies would combine their European interests in consumer products, medical equipment and some electrical distribution equipment, and would co-operate in power systems. GE has been interested in GEC’s medical equipment business, which it no doubt feels should have been its own when it bought RCA Corp since GEC bought Picker, the core of the business from RCA in 1981; the deal satisfies Lord Weinstock’s passion for cash, since GE will pay GEC about UKP325m on completion of all the transactions. At the operational level, the two will create a 50-50 joint venture out of GEC’s Consumer Products Group, including Hotpoint and Creda but not Osram-GEC Ltd, where Siemens AG is GEC’s partner, and GE’s European appliance activities. GEC will merge Picker’s European medical equipment business with GE Medical Systems-Europe and will get a 25% stake in the merged company, and GE and Picker will collaborate on research on advanced medical diagnostic imaging products. And on the power front, GEC’s Belgium-based Vynckier will merge on a 50 50 basis with GE’s Italian-based Compagnia Generale Elettromeccanica SpA creating a business with annual sales of about UKP200m. And the power systems joint venture between CGE’s Alsthom and GEC Power Systems will collaborate with GE to form a European gas turbine firm in which the joint venture will be the majority partner. Sour The stream of announcements brought a very sour statement from Lazard Brothers & Co, trying to get its Metsun Ltd consortium to bid for GEC off the ground. Tagging it More poison pills from GEC, Lazards suggested that all the GEC joint ventures raised important issues over valuation of assets and pre-emption arrangements that can shut out bids and more beneficial transactions for GEC shareholders.
