U.S. News

CNBC's Pisani Says GE Is Close to Finalizing Plastics Sale to Sabic


General Electric is close to selling its plastics unit for almost $11 billion to Riyadh-based chemicals company Saudi Basic Industries  (Sabic), a source familiar with the matter told CNBC's Bob Pisani.

GE is the parent company of CNBC.

The Wall Street Journal also carried a similar report.

Earlier this week, Reuters reported a source familiar with the situation said at least three bidders -- Sabic, Dutch petro-chemical maker Basell and private equity firm Apollo Management -- were in the final stages of the auction with second round bids submitted in the past week. That source said that GE was trying to narrow the bidders down to one party.

Some analysts had expected Sabic to be the lead contender because of GE's close ties to the Saudi government, the Journal said.

Fairfield, Connecticut-based GE put the plastics business on the auction block in January and it attracted interest from a number of private equity firms which since dropped out, sources have previously told Reuters.

GE's Chairman and Chief Executive Jeff Immelt said last month that the effort to sell GE Plastics is on track and the company expects a deal to close in the third quarter.

The unit, which makes plastics for automotive parts, computer enclosures, compact disks, telecoms equipment and construction materials, faced margin pressure in 2006 as a result of the rising price of benzene, a key raw material.

A price of $11 billion would exceed some analysts forecasts that the plastics business could be worth around $8 billion to $10 billion.