FAIRFIELD , Conn., April 10 (UPI) -- General Electric announced it is shedding its financial arm, GE Capital, and much of its real estate holdings to simplify the multinational conglomeration and refocus the company on its industrial roots.
The company announced Friday its exit from the lending business includes a $26.5 billion sale of its real estate holdings, including factories and apartment complexes. A bulk of it has already been purchase by Wells Fargo and private equity firm Blackstone. GE said it will keep its aircraft leasing operation as well as smaller lending lines, but other operations will be sold or spun off in the next two years.
The move will create "a simpler, more valuable company" by reducing the size of its financial and real estate arm, the company said. The company will also buy back up to $50 billion of its own shares in an effort to push up stock prices.
"This is a major step in our strategy to focus GE around its competitive advantages," GE Chairman and CEO Jeff Immelt said. "GE today is a premier industrial and technology company with businesses in essential infrastructure industries. These businesses are leaders in technology, the industrial Internet and advanced manufacturing. They are well-positioned in growth markets and are delivering superior customer outcomes, while achieving higher margins. They will be paired with a smaller GE Capital, whose businesses are aligned with GE's industrial growth."
GE said it will take a hit from the move with a $16 billion after-tax charge against earnings in the first quarter of this year. But the bigger-picture plan is by 2018, the company's core businesses, from jet turbines to sophisticated medical equipment, will account for more than 90 percent of its earnings. That's up 58 percent from last year.
