Tomahawk, WI 02/07/2014 (BasicsMedia) – General Electric Company (NYSE:GE) is proceeding ahead with the strategy of splitting off GE Capital into a separate company and is also planning to launch partial IPO of GE Capital in 2014 in which as much as 20% of the unit will be sold through IPO and the remaining shares will be distributed to GE stockholders in a tax free transaction.

IPO plans  

Analysts believe that GE shall be launching partial IPO of GE capital’s North American financial unit within the coming 2-3 months and it shall be the biggest IPO to be launched after Facebook Inc (NASDAQ:FB) in 2012. GE has reportedly appointed  JPMorgan Chase & Co. (NYSE:JPM) and Goldman Sachs (NYSE:GS) as lead investment bankers for floating the IPO. This move of splitting by GE shall help GE in reducing its exposure to credit risks and to the volatility of services involved in financial industry. GE has been working on splitting off GE Capital since a long time and has shed away GE Capital’s real estate and home loans segment with the view to minimize its risks and losses. Although General Electric Company (NYSE:GE) has declined to comment on the valuation of GE capital and its upcoming IPO but analysts believe that it will be valued around $18 billion to $19 billion based on its annual net income of $2.2 billion.

Conclusion

Although General Electric Company (NYSE:GE)’s shares are trading at low now and the investors are apprehensive about split off of GE’ Capital’s North American financial unit yet GE shares should be a “buy” now if only because of the potential and capability GE possesses in its major core businesses. GE has a growing presence across the globe, its worldwide reach is truly impressive and slowly but surely GE is becoming a power house in itself as it is in talks for a number of hopeful strategic initiatives in oil and gas production, including its liquefied natural-gas partnership with CSX Corporation (NYSE:CSX) and its deal to purchase Cameron International’s (NYSE:CAM) compression division which is destined to give major boost to General Electric Company (NYSE:GE)’s oil and gas business.  GE is therefore a stock to watch out for in 2014!

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