GE is said to ready $1.5bn sale of power-conversion unit

Bloomberg New York General Electric Co is working with bankers on a possible sale of its power-conversion business, people familiar with the matter said, as the fallen manufacturer attempts to regain its footing by slimming down. The unit formerly known as Converteam could fetch about $1.5bn, below the $3.2bn GE paid for the assets in 2011, said the people, who asked not to be identified as the matter isn’t public. Credit Suisse Group AG is working with GE on the sale process, which could begin as soon as next month and isn’t guaranteed to lead to a transaction, the people said. The advisers are likely to approach private equity firms and companies such as Caterpillar Inc, Schneider Electric SE and ABB Ltd, the people said. GE will consider all options and could opt to keep the business, which is known for making oil-rig motors. Representatives of GE, Credit Suisse, Schneider and ABB declined to comment. Representatives for Caterpillar didn’t respond to requests for comment. A deal would deepen GE chief executive off icer John Flannery’s eff orts to streamline the conglomerate, which is reeling from cash-flow challenges and a power-market slump. He has already agreed to unload the century-old locomotive business, while also promising to spin off the health unit and sell GE’s majority stake in oilfield-equipment maker Baker Hughes. GE fell 26% this year through Thursday, following a 45% plunge in 2017. The slump, which has wiped out $167bn in investor wealth since the beginning of last year, prompted GE’s recent expulsion from the Dow Jones Industrial Average. The power-conversion unit builds motors, generators and automation controls for industries such as marine transportation and oil and gas. A sale would further unwind the sprawling version of GE pushed by former CEO Jeff rey Immelt, who stepped down last year. During his 16-year tenure, Immelt built a sizeable oil equipment business, started a digital division, expanded the health unit and bought power assets such as Converteam — all of which are being divested or shrunk under Flannery. While GE is keeping its power, renewable energy and aviation divisions under Flannery’s recovery plan, the CEO is still looking to prune unwanted pieces. The company agreed in June to sell its industrial gas- engine business to Advent International for $3.25bn.