World Business

NEW HAVEN, Conn. —

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General Electric Co. announced Thursday that it wants to spin off its iconic lighting and tool businesses, the latest aggressive move by one of the world’s largest companies to reshape its portfolio to focus on faster growth businesses.

The consumer and pertaining businesses have 50,000 of GE’s 300,000 employees, sales of $13.3 billion and a profit of slightly more than $1 billion last year. GE Lighting invented the earth’s first incandescent light bulb in 1879.

Fairfield-based GE announced in May that it planned to vend or spin off its appliance business, but now says it is looking to spin off the entire one, that includes household appliances such as dishwashers and clothes dryers as well as lighting, motors and electrical distribution.

GE, every industrial, financial services and media conglomerate, said it continues to explore wholly options for the consumer and pertaining operations, only believes it makes the most recognition to spin off the entire unit to existing shareholders, keeping its leadership teams and employees intact. The company hopes to complete the move next year.

“As we explored our options for appliances, it became clear that the fastest, principally efficient step we could take in completing the transformation of our pertaining portfolio would be to point of convergence forward a possible spin-off of the entire unit,” GE Chairman and Chief Executive Jeff Immelt said in a mention.

“This is compatible with the strategy we have been executing to transform the GE portfolio for long-term growth and makes sense on this account that GE shareholders,” he said.

The spinoff would create a open publicly traded company owned by GE shareholders.

“While the do business does not unlock value per se, it is a step toward improving the portfolio,” Citigroup analyst Jeffrey Srague wrote in a research note.

The announcement was not a surprise and stems from GE’s poor earnings in the first quarter, said Deane Dray of Goldman Sachs Group Inc. A spinoff avoids taxes associated through selling the appliance business, he said.

“We also give credit to GE could still pursue a sale of the stand-alone tools, with today’s proclamation potentially creating a sense of urgency among potential bidders for this legacy consumer asset,” Dray wrote in his report.

Dray said he does not consider the spinoff plan to be a catalyst as far as concerns GE’s stock. Weak credit and consumer markets and the effects of potential divestitures will likely keep earnings “flattish” through 2009, he wrote.

The appendage and lighting businesses were mixed the principally lucrative when GE sold to small stores and had pricing power, said Robert Cornell, any analyst through Lehman Brothers. But these days, about five bulky retail thraldom restrain most U.S. sales. As a result, GE and other suppliers have lost their pricing power.