GE's hyperactive Immelt pledges further change

Concluding a week when he has spent $15bn (£7.5bn) on acquisitions, Jeff Immelt, the chairman of General Electric, promised yesterday to continue his reshuffle of businesses inside the world's largest conglomerate.

The company's plastics division - which can trace its origins back to the scientific work of GE founder Thomas Edison - is up for sale, Mr Immelt confirmed, and 15 potential bidders have registered their interest in what could be a $10bn deal.

His comments came as GE unveiled results for 2006, detailing sales and profits from a portfolio of products that range from simple electric light bulbs to aircraft engines, and from business stretching across manufacturing, broadcasting and financial services.

The company - the largest in the world, bar Exxon Mobil - had annual sales of $163bn, and made a profit of $20.7bn.

Mr Immelt said the conclusion of three acquisitions in the past fortnight had been a coincidence. "When you see me do $15bn in two weeks, sometimes you say 'Is he crazy?'," he said. "This is all part of a five-year, long-term diligence on the company, and we are basically on strategy to redeploy into fast growth from slow growth."

So far this year, GE has paid $1.9bn for an Italian manufacturer of drilling equipment for the oil industry, $4.8bn for the aerospace division of the UK's Smiths Group, which supplies equipment for most of the big civil and military aircraft programmes, and - on Thursday - $8.1bn for the medical tests businesses of Abbott Laboratories in the US.

Since Mr Immelt took over from Jack Welch in 2001, his leadership has been characterised by big disposals and acquisitions, with deals often coming in flurries. In one week in 2003, he bought the FTSE100 company Amersham, which made medical scanners, and Vivendi Universal's US film and television interests.

Yet his mantra has been one of squeezing organic growth from GE's existing businesses. "We need to be big in big industries, that's how we grow," Mr Immelt said, by way of explaining the contradiction, and he used health care as an example. "Health care is the bubble-less market. It is worth $4 trillion and is growing at 8 per cent a year. The bow-wave of demographics is unstoppable."

GE shares, though, were down yesterday as investors feared that GE was falling short of expectations in its ambitious plan to grow the existing businesses by two to three times the rate of the global economy. The company only met Wall Street's earnings forecasts because its tax bill had come in much lower than predicted.

Profit in the industrial unit, which includes plastics, unexpectedly fell on higher materials costs. Its earnings dropped 12 per cent in the fourth quarter, after GE had forecast an increase of at least 5 per cent.

Thomas Edison's experiments with plastic filaments for light bulbs in 1893 led to the first GE Plastics department, created in 1930, but Mr Immelt signaled that it was finally on the block. And he predicted a successful auction, with both private equity groups and industry buyers participating.

With industry players having access to low-costs finance, and private equity flush with cash, analysts believe Mr Immelt's quest to reshape GE around long-term growth businesses may mean the disposals don't stop with plastics.

As Mr Immelt said yesterday: "There so much capital around that you have the ability to do almost any deal you want to do."