Sale of General Electric Co.'s plastics division to Saudi Basic Industries Corp. (SABIC) for about US$11.6 bln (€8.63 bln) has been granted approval by the EU. This sale is an important step in GE's strategy to sell slower growth units, so it can invest in high-growth, high-technology businesses like health care and water processing technology.
The European Commission found no antitrust problems with the transaction, saying the companies' product ranges were complementary - with SABIC focusing on raw materials and GE Plastics specializing in refined engineering plastics. Regulators also looked at how the deal might affect the supply chain but said neither was important enough as a supplier or a customer to shut off access to supply or demand to rivals. GE Plastics struggled since 2004 due to rising costs of natural gas and raw materials and saw a fall in profits by 22% in 2006 to US$674 mln (€501 mln).