DealZone

Interview with General Electric CEO Jeffrey Immelt

General Electric CEO and Chairman Jeffrey Immelt gives a speech during a conference on "Establishing healthcare as a source of growth" in Tokyo May 31, 2010.  REUTERS/Yuriko NakaoWatch Reuters Editor at Large Chrystia Freeland’s interview with General Electric CEO Jeffrey Immelt. Immelt met Chinese President Hu Jintao today and GE is reporting quarterly results this Friday. What’s Immelt’s vision for the manufacturing giant? See the discussion below.

Deals wrap: Novartis sweetens the deal

A general view shows the production plant of the pharmaceutical company Novartis in Schweizerhalle near Basel July 21, 2008. Picture taken July 21, 2008.  REUTERS/Christian Hartmann Novartis has wrapped up its long-awaited buyout of the remainder of U.S.-listed Alcon for $12.9 billion, after sweetening its original offer with cash.

Power producer Dynegy agreed to be bought by Icahn Enterprises, a firm controlled by billionaire investor Carl Icahn, for $665 million in cash. The deal comes after Dynegy rejected Blackstone Group’s $602 million bid in November.

General Electric Chief Executive Jeffrey Immelt’s problems have changed an awful lot in the past two years. Worry about a hidden time bomb in its financial arm has been replaced with concerns the company has built up too much cash.

from Breakingviews:

GE shareholders get a little too deal-happy again

General Electric's shareholders seem curiously overjoyed to see the conglomerate back in shopping mode. They added nearly $4 billion to GE's market cap on Wednesday, when the company splashed out $3 billion on an energy infrastructure business, confirmed its interest in a British maker of oil pipes, and snapped up a package of some of Citigroup's more questionable loans. It's a change from years on the back foot selling assets. But the celebration looks overdone.

GE, under chief executive Jeff Immelt, has overspent on takeovers in the past, and it's hard to get a handle on whether or not it is bringing newfound discipline to its mergers and acquisitions machine. That should matter to shareholders. The fallout from past missteps, overlaid with the financial crisis, has cost GE's owners some $250 billion in lost market value over the past three years -- almost the exact equivalent of Apple's entire market cap.

Immelt's purchase of Dresser doesn't at first sight look like the most lucrative step back into the deal businesses -- though it's hard to be sure, as GE isn't saying much about Dresser's financials. It says the business had 2009 "earnings" of $318 million. Assume that's pretax income, as Credit Suisse suggests, and that the purchase price includes any debt, something GE hasn't confirmed. That would equate to an after-tax annual return of just around 7 percent absent any synergies. That's not terrible, but it's less than the 9.2 percent at which Morningstar estimates GE's weighted average cost of capital.

Deals wrap: Dealing with regulation

Traders work on the floor of the New York Stock Exchange near the Goldman Sachs stall July 16, 2010. REUTERS/Brendan McDermidBanks are self-regulating in advance of new financial reforms. Are recent moves by Goldman Sachs and JPMorgan “smoke and mirrors” or a way to subtly shift the form of impending regulation? *View analysis *View Q&A on Wall Street reform*Full coverage of regulatory news

“Unlocking the potential of Genzyme’s experimental multiple sclerosis drug Campath could be key to prying a higher price for the U.S. biotech from Sanofi-Aventis,” writes Lewis Krauskopf and Ben Hirschler. *View analysis *View WSJ blog

General Electric is building up its industrial business with a $3 billion bid for Dresser Inc. The deal announcement came the same day as oilfield services company Wellstream rejected GE’s takeover approach. *View article

GE’s Immelt: Wasn’t “naive” on Areva bid

GE/As GE officials have talked up their post-NBC M&A strategy over the past few weeks, they keep coming back to the one that got away — French nuclear reactor maker Areva’s transmission and distribution business. Areva in November decided not to accept bids from U.S. conglomerate General Electric Co or Japanese industrial Toshiba in favor of a bid from a French consortium, in a move that many saw as politically influenced.

GE Chief Executive Jeff Immelt told investors on Tuesday he was not surprised by that turn of events. “We were never naive about where Areva was going to go,” Immelt said. “We were in but we were not stupid.”

from MediaFile:

Comcast, NBC Universal pledge support for local news

Comcast has finally unveiled its formal announcement that it plans to take control of NBC Universal from General Electric. Public interest groups and various U.S. government types have been tutting and clucking over whether this media mega-deal would be against the national interest, and few doubt that Congress and the administration will want to review this plan in loving detail.

To that extent, Comcast released a memo on Thursday outlining its public commitments. There are a bunch in here, but this old-school journalist wants to point out above all else that the company said it's committed to preserving and enriching "the output of local news, local public affairs and other public interest programming on NBC O&O ("owned and operated") stations."

That's a mighty strong commitment to make. Let's hope that it doesn't do what many radio and TV stations have done for years to satisfy their government-mandated public interest requirements and stick all that stuff on the air at 5 a.m. Sunday morning. Also, how much more money will they provide?

Final chapter of an aviation flirtation?

Throughout 2009, United Technologies Corp Chief Executive Louis Chenevert’s mantra was that the diversified U.S. manufacturer was a “willing buyer” with a $2 billion takeover budget and that all it needed was to find a “willing seller.”

Its deal last week to buy General Electric Co’s security business for $1.82 billion answered the question of what the world’s largest maker of elevators and air conditioners was going to do with its M&A budget.

But one question was left unanswered — what of Textron Inc’s Bell helicopter unit? An executive at United Tech’s Sikorsky arm in March said that a merger with Bell was an “interesting hypothesis.”

GE: bringing small things to life

GENERALELECTRIC/With talk about a multibillion-dollar deal to sell NBC Universal to Comcast burbling away, General Electric CEO Jeff Immelt popped the top on a $250 million venture fund designed to buy stakes in small healthcare technology companies.

“What we’re trying to do is embrace the venture community, try and do a series of early-stage and later-stage type investments,” Immelt said in an interview. “We don’t do everything inside our four walls.”

Competing venture capitalists might consider Immelt’s embrace more of a bear hug. GE is taking a similar approach to the energy industry. It has a stake in A123 Systems, the battery maker that was one of the best-received initial public offerings of the year. Scott Malone, our reporter who interviewed Immelt, notes that taking stakes in smaller companies rather than buying them outright gives GE more flexibility. It gains exposure to a wider array of technologies, any one of which could take off.

Did he say IPO?

Speaking in New Delhi, General Electric CEO Jeffrey Immelt said “Discussions are ongoing whether it is an IPO or another partnership,” in response to a question on whether GE was talking to Comcast to sell a stake in the fourth-placed TV network and movie studio. With Vivendi possibly just a couple weeks away from unloading its 20 percent stake in the NBC venture, and all the talk this week about Comcast gathering coins to add the content trove to its cable mix, it might seem as if Immelt is trying to conjure something like a rabbit from a hat – or a peacock from a beret.

GE and Comcast are discussing a deal under which the largest U.S. cable firm would take control of 51 percent of NBC Universal with GE, which has the right of first refusal to pick up Vivendi’s stake if the French company exercises its annual option to sell, taking the rest. “The capital markets have definitely improved,” Immelt said. There is reason to see stability and some optimism for the future,” he said.

Set aside for a moment that the sickly advertising market that NBC already faces. The market for IPOs is picking up nicely right now, but is still in an early stage of recovery, making do with a ragtag bunch of real estate investment trusts and Chinese new-market plays. What effect do you think a big media play splashing into that pool would have on investor demand for new issues?

GE’s Immelt’s subtle defense

General Electric Co Chief Executive Jeff Immelt went to Michigan, the bleeding heart of the U.S. industrial heartland, on Friday to call for a resurgence in American manufacturing.Jeffrey R. Immelt, Chairman and CEO of General Electric, speaks after being honored by the national non-profit group "A Better Chance" in New York
But even as he warned against relying too heavily on the financial industry to drive economic growth, he subtly set up a defense of the largest U.S. conglomerate’s hefty finance arm.

Analysts and investors are worried that the Obama administration’s proposed overhaul of U.S. financial regulations could force GE to spin off GE Capital, which has businesses ranging from leasing jet planes to investing in commercial real estate.

“We also need a financial system that is built around helping industrial companies to succeed,” Immelt told the Detroit Economic Club. “GE is an important part of this financial services approach. We plan to focus GE Capital on financing small- and medium-sized customers in industries that we know the best.”