GE to invest $2bn in China
By Geoff Dyer and Peter Marsh
Published: April 16 2008 03:00 Last updated: April 16 2008 03:00
General Electric plans to invest up to $2bn in acquisitions and other deals in China over the next three years as part of a strategy to double its revenues in the country. The world's biggest industrial company is looking to hire a team of 20 "in-house investment bankers" to conduct the deals in China. "If we do not invest $2bn over the next three years, I would be disappointed," said Steve Bertamini, chairman of GE's Chinese operations, in an interview with the Financial Times.
The aggressive investment plans, which will include acquisitions and joint ventures, underline GE's intention to expand its China business rapidly at a time when its domestic operations face a slowing US economy.
Mr Bertamini said the team of deal specialists had already been expanded from two to eight and the recent sharp drop in the mainland stock market, which is down nearly a half from its peak, would make it easier to negotiate investments.
"One of the reasons we have not done much so far is because the prices have been so high," Mr Bertamini said. "The risk . . . is that share prices take off again."
GE said it would continue to enter into joint ventures with leading Chinese companies in several sectors where the group is active - such as infrastructure and power generation.
GE plans to increase its 2007 revenues in China of $4.4bn to $10bn by 2010, which would require the US company to expand more than twice as fast as the economy's double-digit rate of growth.
"The wider problems in the credit market and the signs of a slowing in the overall global economy have not entered the picture [in China]," he said.
The comments come just days after GE slashed its full-year earnings forecast because of the effect of the credit crunch.
Geoff Dyer and Peter Marsh, Shanghai
By Geoff Dyer and Peter Marsh
Published: April 16 2008 03:00 Last updated: April 16 2008 03:00
General Electric plans to invest up to $2bn in acquisitions and other deals in China over the next three years as part of a strategy to double its revenues in the country. The world's biggest industrial company is looking to hire a team of 20 "in-house investment bankers" to conduct the deals in China. "If we do not invest $2bn over the next three years, I would be disappointed," said Steve Bertamini, chairman of GE's Chinese operations, in an interview with the Financial Times.
The aggressive investment plans, which will include acquisitions and joint ventures, underline GE's intention to expand its China business rapidly at a time when its domestic operations face a slowing US economy.
Mr Bertamini said the team of deal specialists had already been expanded from two to eight and the recent sharp drop in the mainland stock market, which is down nearly a half from its peak, would make it easier to negotiate investments.
"One of the reasons we have not done much so far is because the prices have been so high," Mr Bertamini said. "The risk . . . is that share prices take off again."
GE said it would continue to enter into joint ventures with leading Chinese companies in several sectors where the group is active - such as infrastructure and power generation.
GE plans to increase its 2007 revenues in China of $4.4bn to $10bn by 2010, which would require the US company to expand more than twice as fast as the economy's double-digit rate of growth.
"The wider problems in the credit market and the signs of a slowing in the overall global economy have not entered the picture [in China]," he said.
The comments come just days after GE slashed its full-year earnings forecast because of the effect of the credit crunch.
Geoff Dyer and Peter Marsh, Shanghai
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