HONG KONG/FRANKFURT (Reuters) - At least two Chinese companies are preparing bids for industrial conglomerate General Electric’s (GE.N) remaining lighting assets in a potentially $1 billion deal, according to people familiar with the situation.
MLS Co 002745.SZ and Foshan Electrical and Lighting Co 000541.SZ, both lighting manufacturers based in southern China’s Guangdong province, have been in talks with lenders to finance a potential bid for the asset, one of the people said.
GE on Monday sent out teasers to interested parties about the sale process, to be followed by information memos in a couple of weeks and a first round of bidding thereafter, another source said.
GE declined to comment. MLS could not be reached for comment, while Foshan did not immediately reply to a request for comment. The people could not be named as the information is confidential.
In mid-February, GE reached a deal to sell the European parts of its overseas lighting business to a company controlled by former executive Joerg Bauer for an undisclosed amount. That marked the first step in the divesture of the lighting business.
Shedding the remaining, mainly U.S.-based lighting business is part of a broad restructuring plan aimed at divesting $20 billion worth of assets to focus the remaining company on three core divisions: power, aviation and health care.
Among other options, GE is exploring a sale of its industrial gas engine business that could be worth as much as $2 billion, people close to the matter said last month.
Profit at GE’s lighting business fell sharply last year. It earned $93 million on revenue of nearly $2 billion in 2017, down from $199 million on $4.8 billion in 2016.
GE said last month they would be marketed as part of a separate sale or sales.
Editing by Mark Potter