GE Moves to Sell First Part of Lighting Business

By Thomas Gryta 

General Electric Co. reached a deal to sell parts of its overseas lighting business to a former executive for an undisclosed amount, the first move for the conglomerate to separate with one of its oldest and most iconic businesses.

The deal includes GE Lighting in Europe, the Middle East, Africa and Turkey, along with its Global Automotive Lighting businesses. The buyer is a company controlled by Joerg Bauer, the former president of GE Hungary, where the included lighting units are based. The businesses will operate as the Tungsram Group and use the GE brand for a transition period, according to a GE spokeswoman.

The deal doesn't include the bulk of GE Lighting, including its North America operations and its commercial LED lighting business, which the company is still in the process of selling.

The sale, which GE has been weighing since early last year, comes as the company is restructuring itself under CEO John Flannery. Last fall, GE slashed its dividend and financial projections and pledged to sell at least $20 billion in assets. The process of selling the lighting business began under former CEO Jeff Immelt, who retired last year.

While the lighting business is iconic for GE -- which was co-founded by Thomas Edison -- the products have become commoditized and profit margins are thin. Last year, the entire division had revenue of about $2 billion with $93 million in profit. GE's total revenue that year was $122.1 billion.

GE said the proposed sale is subject to signing local agreements and is expected to close in phases by the end of June. The operations include more than 4,000 employees, mostly based in Hungary, and five manufacturing sites in that country.

Write to Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

February 15, 2018 18:07 ET (23:07 GMT)

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