GE Announces Sale of Plastics Business to SABIC for $11.6 Billion; Industrial Portfolio Transformed for Stronger Growth; Proceeds to Be Used for Stock Buyback

FAIRFIELD, Conn.--()--GE (NYSE: GE) today announced that it has signed a definitive agreement to sell GE Plastics to Saudi Basic Industries Corporation (SABIC), a globally respected petrochemicals manufacturer, in a deal valued at $11.6 billion in cash plus assumption of liabilities. The closing of the transaction is subject to customary conditions, including the receipt of regulatory approvals, and is targeted for the third quarter of 2007.

Over the past five years, we have transformed our portfolio of businesses through smart dispositions and investments in higher-growth, higher technology businesses, GE Chairman and CEO Jeff Immelt said. This transaction is another important step in the execution of this strategy, which has created a faster-growing, higher-returning set of businesses capable of delivering sustained performance.

This sale is the right move at the right time for GE shareowners, Immelt said. We received a good price from a respected global company in a highly competitive bidding process. We will use the proceeds to fund the stock buyback and strengthen the company through restructuring, Immelt said.

SABIC is the right owner for our customers and our employees, Immelt said. This transaction will transform the plastics industry by combining SABICs low-cost materials position and global reach with GE Plastics strong marketing and technology capabilities. SABIC also has a record of investing in acquired businesses and their people. They have committed to support the U.S. and global growth of the Plastics business, and they value the Plastics team and its facilities across the U.S. and the rest of the world.

This transaction is also good for other GE businesses, Immelt said. GE has long-standing relationships with SABIC and others in Saudi Arabia who buy many energy, healthcare, aviation and high-technology products, Immelt said. SABIC has committed to strengthen its relationship with GE, which is good for our businesses and employees that make these products.

GE will receive net after-tax proceeds from the sale of approximately $9 billion. The proceeds will be principally used to re-launch the current stock buyback, increasing the 2007 planned share repurchase from $6 billion to $7-to-8 billion. The sale will generate an approximate after-tax gain of $1.5 billion, which will be used to fund restructuring across GEs businesses and the share repurchase.

Mohammed Al-Mady, vice chairman and CEO of SABIC, said, This acquisition of GE Plastics represents another step in SABICs growth and diversification to become one of the worlds leading manufacturing companies. GE Plastics is a high-quality organization with a great tradition at GE and it brings people, products and technology of significant value for our customers and our growth. It is a good addition for us and an important business relationship. The deal brings us a new market and 30,000 important customers worldwide.

GE Plastics is a $6.645 billion global supplier of plastic resins widely used in automotive, healthcare, consumer electronics, transportation, performance packaging, building and construction, telecommunications, and optical media. It is headquartered in Pittsfield, MA. and employs 10,300 people in 60 locations worldwide with outstanding records of quality and environmental performance.

SABIC is one of the worlds 10 largest petrochemicals manufacturers ranked by market capitalization (currently U.S.$ 80 billion). The company is among the worlds market leaders in the production of polyethylene, polypropylene, glycols, methanol, and fertilizers as well as the fourth largest polymer producer. SABIC has record of operating excellence in safety, health and environmental protection for all of its facilities around the world.

Brian Gladden, who currently serves as vice president of GE Plastics resin business, will be president and chief executive officer of the new business, which will be renamed upon completion of the transaction. Charlene Begley, currently president and CEO of GE Plastics, will move to a corporate role focused on closing the transaction reporting to CEO Jeff Immelt.

"Brian and his world-class team now have the right resources to truly transform this industry globally, said GE Vice Chairman Lloyd Trotter, who oversees GEs Industrial businesses including Plastics. "Plastics has been a great GE business filled with great people who have a long record of innovation, global execution and leadership products. We thank everyone at Plastics for all they have done for GE and wish them the very best in their new company."

Goldman Sachs and Lehman Brothers served as financial advisors and Weil, Gotshal & Manges LLP served as outside legal counsel for GE in this transaction.

About GE

GE is Imagination at Work -- a diversified technology, media and financial services company focused on solving some of the worlds toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing and media content. GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.

About SABIC

Saudi Basic Industries Corporation (SABIC) is the largest public company in the Middle East, ranked by market capitalization (currently U.S.$ 80 billion), and one of the worlds 10 largest petrochemicals manufacturers. The company is among the worlds market leaders in the production of polyethylene, polypropylene, glycols, methanol and fertilizers as well as the fourth largest polymer producer.

Headquartered in Riyadh, Saudi Arabia, SABIC was founded in 1976. SABICs other global facilities are in Singapore for Asia Pacific and in Sittard, the Netherlands, for Europe. In Europe, the company employs approximately 3,300 people and has three petrochemical manufacturing sites at Geleen (the Netherlands), Teeside (United Kingdom) and at Gelsenkirchen (Germany). The company has dedicated research and technology centers in Riyadh, Geleen in the Netherlands, Houston USA, and Vadodara in India. SABIC has more than 17,000 employees worldwide.

Caution Concerning Forward-Looking Statements

This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

Contacts

GE
Russell Wilkerson, 203-373-3193
russell.Wilkerson@ge.com
www.ge.com
or
GE Plastics
Jeff DeMarrais, 413-448-7383
Jeffrey.demarrais@ge.com
http://www.geplastics.com/

Contacts

GE
Russell Wilkerson, 203-373-3193
russell.Wilkerson@ge.com
www.ge.com
or
GE Plastics
Jeff DeMarrais, 413-448-7383
Jeffrey.demarrais@ge.com
http://www.geplastics.com/