GE: Buffett's Last Takeover?

[james22]

Given:

 

- GE seen as likely to embrace major company break-up, sources tell CNBC's David Faber.

 

- GE breakup could come as soon as this spring, the sources said.

 

- "We are looking aggressively at the best structure or structures for our portfolio to maximize the potential of our businesses," CEO John Flannery said on an investor call.

 

https://www.cnbc.com/2018/01/16/ge-break-up-announcement-to-occur-as-early-as-this-spring-sources.html

 

Any chance provides an opportunity for Berkshire?

 

https://www.livewiremarkets.com/wires/ge-buffett-s-last-takeover

[Liberty]

Wouldn't be surprised if they tried to pick up some assets, but they don't do hostile and they usually don't offer the highest price if there's multiple bidders and/or auctions, so it might not happen.

[Guest longinvestor]

This from USA today;

 

The slimmed-down unit's insurance portfolio was the focus of GE's latest financial problem. The company exited most of the insurance business from 2004-06 but decided to keep current books of insurance-related business based on the view that a "gradual runoff would yield the better economic result," Flannery said. "In hindsight, we underappreciated the risk in this book"

 

Likely clue to how Berkshire could be in the picture. Smells like another AIG type deal for Jain.

 

[rb]

I posted about this in the GE thread. In my view it's unlikely for Berkshire to chomp GE or large parts of it. GE is a bureaucratic mess. I don't think Buffett would like to bring that into his house. They may pick up smaller cyclical pieces that not many people want like transportation or water.

 

One exception would be if they do the deal with 3G and then the 3G go in slash and burn and get the place ship shape. But 3Gs experience so far has been in consumer businesses I don't know if they would be as effective in an industrial company like GE.

 

Edit: GE is a giant elephant with great big husks. If they actually do pull it off it would represent some massive bragging rights for Berkshire. I'm sure Buffett is tempted after reading their ARs for like 70 years and dreaming about owning it. Must be like a kid that had a Lamborghini poster on his wall as a teenager and now he can actually get the Lamborghini.

[Eye4Valu]

It's only a question of the "right number!"

 

https://www.cnbc.com/video/2018/01/10/warren-buffett-wed-buy-ge-at-the-right-number.html

 

 

[ValueMaven]

"Both our operating and investment experience cause us to conclude that turnarounds seldom turn," #WEB

[rb]

"Both our operating and investment experience cause us to conclude that turnarounds seldom turn," #WEB

Sure. But the problem with that statement is that GE doesn't need a turnaround.

[ValueMaven]

you are implying that the ARs for the last 70 years are relevant though...they are not given all of the massive write-downs, and the horrible misallocation of capital at GE Cap post sale (did that huge buyback when the stock was almost double)...It's all about price, but I dont see WEB playing around here, unless its in a break-up, or a unique preferred deal, which is also unlikely.