Banking, finance, and taxes
Did GE Get Enough for Its Asset Management Sale?
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General Electric Co. (NYSE: GE) is getting ever further along the path to being viewed as an industrial conglomerate rather than as a conglomerate with a huge bank, lending and financial services operations. Now comes news that GE has sold its own asset management unit to State Street Corp. (NYSE: STT) for up to $485 million.
While this will be viewed as just one more step along the path to an industrial focus, 24/7 Wall St. cannot help but wonder if GE is actually getting anywhere close to enough for the disposition. The outcome of this will of course depend on the total payments, and historic valuations for asset managers may no longer hold true in a financial world dominated by exchange traded funds (ETFs) and with near-zero interest rates.
State Street Global Advisors (SSGA) has roughly $2.3 trillion in assets under management globally. SSGA will now manage assets of the GE pension plan and that of other client assets included in the deal (if they transition).
There is no change to pension benefits received by GE pension plan participants as a result of this transaction. What stands out about the disposition is that GE said it will deposit the net sale proceeds from the transaction into the GE Pension Trust. In one manner, it could be argued that GE was just getting rid of the asset.
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