Employees install equipment on General Electric Co. (GE) Evolution Series Tier 4 diesel locomotives at the GE Manufacturing Solutions facility in Fort Worth, Texas, U.S. (Photographer: Luke Sharrett/Bloomberg)  

GE Is Said to Explore Spinoff of Locomotives Unit, WSJ Reports

(Bloomberg) -- General Electric Co. is leaning toward a spinoff or initial public offering of its locomotives unit as it weighs options other than traditional sales for assets it plans to shed, according to a report from the Wall Street Journal.

GE Transportation isn’t likely to be sold and could be merged with a company that would give GE shareholders control of a new public entity, the Wall Street Journal said Thursday, citing unidentified people familiar with the matter. A potential hybrid deal could serve as a model for other divestitures GE is pursuing as it looks for ways to avoid large tax bills, according to the story.

A GE representative declined to comment.

The manufacturing giant has said since last year that it would consider all options while exiting at least $20 billion of businesses, including locomotives and lighting. While GE said this month that it would sell a portion of GE Healthcare for $1.05 billion, the seemingly slow pace of divestitures has generated questions among analysts.

Chief Executive Officer John Flannery has put the assets on the market as he seeks to stem a deep slide in GE’s shares. The stock has been the worst performer in the Dow Jones Industrial Average this year and last as GE contends with weak demand for industrial equipment and cash-flow challenges.

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