Capital Markets

Corporate Housecleaning: Like $5B Worth?

Beyond GE's appliance-business auction, Sharper Image and Marsh are pruning also, and Paris-based Credit Agricole is a seller.
Stephen TaubMay 15, 2008

Homeowners are not the only ones busily trimming and pruning and sprucing up their properties this spring. A crush of corporate reports this week shows a propensity right now for unloading assets — including some huge assets — that may be crimping their overall prosperity.

Most notable was General Electric Co.’s reported plan to sell or divest its once-gilded appliances business, which could fetch the conglomerate somewhere between $5 billion and $8 billion, according to press reports. Buyers being tossed around in the press this morning include China’s Haier, South Korea’s LG Electronics and Samsung, Germany’s Bosch, Sweden’s Electrolux, and Mexico’s Controladora Mabe.

But Sharper Image Corp., currently in bankruptcy, also has assets for sale. It received court permission to sell all of its businesses at a May 28 auction, according to the Denver Post. Last month, Sharper Image Chairman Jerry W. Levin resigned after informing the gadgets company that he is interested in participating with other investors to acquire some or all of the company’s businesses or assets.

Further, Marsh & McLennan Cos. confirmed on Thursday that the insurance brokerage is looking to divest some divisions of its Kroll investigative unit that didn’t fit into its business. According to Reuters, Marsh CEO Brian Duperreault also told the Marsh & McLennan annual meeting that his vision was to grow the company organically as well as through acquisitions.

And in the banking arena, Paris-based Credit Agricole said it plans to sell up to about $7.7 billion worth of assets over an 18-month period as part of an overall program designed to contend with what it calls the current financial crisis and changing regulatory environment.

The announcements come at a time when the mergers and acquisitions business is starting to show a little bit of life.

Given the credit crunch, however, most experts believe that most deals in the near future will likely be strategic transactions pursued by operating companies in the same industry as the business being put up for sale.

4 Powerful Communication Strategies for Your Next Board Meeting