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General Electric to split off Employers Re unit-WSJ
NEW YORK, March 15 (Reuters) - General Electric Co. (NYSE:GE - news) is in the early stages of considering a plan to split off Employers Reinsurance Corp., its property-and-casualty insurance unit, the Wall Street Journal reported on Friday.
The move could involve an initial public offering of 20 percent of the unit later this year, the Journal said, citing people familiar with the matter.
An IPO could be expected to value the business at $8 billion to $10 billion, the Journal said.
General Electric was not immediately available to comment on the Journal article.
``Since Employers Reinsurance was acquired in 1984, it has generated nearly a 22 percent return on investment. Today, however, the property and casualty market suffers from a challenging pricing environment, escalating claims costs, soft contract terms, the September 11 attack and a toughened investment environment,'' GE said in its 2001 annual report.
After the 20 percent IPO, the company would probably wait for a tax opinion before spinning off the remaining 80 percent, the Journal reported.
Among the investment banks interested in the IPO are Goldman Sachs, Morgan Stanley and Merrill Lynch, the Journal said. |
