A Fairfield, Conn., conglomerate says it will be continuing to pull back from the life insurance industry.[@@]
The company, General Electric Company, says it will sell up to 82 million shares of Class A common stock issued by Genworth Financial Inc., Richmond, Va.
That deal and a related deal, which would involve Genworth buying more than $400 million in Genworth B common stock from GE at the net price GE receives for the Class A stock, could reduce GE’s stake in Genworth to about 51% of Genworth’s common stock, according to GE and Genworth.
Completion of the Class B deal would be contingent on the completion of the Class A deal, Genworth says.
A unit of Citigroup Inc., New York, would sell GE’s Genworth shares through a secondary public offering.
GE says it wants to use the proceeds from the Class A stock sale to “eliminate ?parent-supported’ debt at GE Capital and enable GE Capital to increase the dividend it pays GE from 10% of its earnings to 40% commencing in the second quarter.”
GE sold 30% of Genworth common stock through a $2.9 billion initial public offering in May 2004.
GE says it plans reduce ownership in Genworth further over the next 2 years as the life insurance and financial services company moves to full independence.