GE to sell real estate holdings, sets $50 bn share buyback

General Electric Company said it would sell the bulk of its real estate portfolio to investors including Blackstone Group and Wells Fargo & Co for USD 26.5 billion, in the biggest commercial real estate deal since 2007.

The company, which has been refocusing on its industrial businesses, also said its board had authorized a share repurchase program of up to USD 50 billion.

The plan allows GE to buy back nearly 2 billion of its outstanding shares, based on Thursday's close.

GE's shares rose 2.2 percent to USD 26.30 in premarket trading on Friday. The stock rose nearly 2 percent on Thursday after the Wall Street Journal first reported that the company was close to selling its real estate holdings.

GE has been selling off its property investments globally as it focuses on improving earnings from sales of products such as jet engines, generators, electric grid gear and oil field equipment.

The company said on Friday it expected earnings from its aviation, power and water, and other industrial businesses to account for about 90 percent of total earnings by 2018. The units made up just over half of GE's profit in 2013.

GE said it would take after-tax charges of about USD 16 billion related to the restructuring in the first quarter, of which about USD 12 billion would be non-cash.

Blackstone and Wells Fargo said they would buy most of the assets of GE Capital Real Estate in a deal valued at about USD 23 billion.

GE said it also had letters of intent to sell an additional USD 4 billion of commercial real estate assets to other buyers that it did not identify.

The company said it expected to reduce its share count to 8 billion-8.5 billion by 2018. GE had 10.06 billion shares outstanding as of January 31.

The deal is the biggest commercial real estate deal since Blackstone's acquisition of office landlord Equity Office Properties Trust in 2007 for USD 39 billion, including debt.