updated 5/18/2007 8:26:56 AM ET 2007-05-18T12:26:56

General Electric Co. is close to an agreement with a Saudi industrial giant to buy GE's plastics division for about $11 billion, The Wall Street Journal reported Thursday.

GE has been in talks with Saudi Basic Industries Corp., Saudi Arabia's largest industrial firm. Another suitor in what has been a long auction process is Basell, of Hoofddorp, Netherlands, the newspaper reported on its Web site.

The Journal, citing people familiar with the matter that it did not identify, said an agreement could come as soon as Monday.

Gary Sheffer, a spokesman for Fairfield-based GE, declined to comment Thursday night.

GE announced in January that would look at a potential sale of its plastics business as part of its strategy to sell off slower-growth businesses and focus on faster-growth areas like energy, oil and gas equipment, rail engines, health care technology, finance, and water processing technology, including desalination.

(MSNBC.com is a joint venture of Microsoft and NBC Universal, which is a GE company.)

The plastics division has struggled since 2004 because of inflation in natural gas and raw materials such as benzene. Profits for the division fell from $867 million in 2005 to $674 million last year, or about 22 percent.

Sabic, one of the largest non-oil companies in the Middle East, has manufacturing and research facilities around the world. With the plastics unit, the Saudi company would be a global titan in the production of materials used to make bottles, food and beverage packaging, grocery bags, toys, car parts and other everyday items.

Analysts expected Sabic to be the stronger contender because of GE's close ties to the Saudi government. GE has billion-dollar contracts to sell gas turbines for new power plants in Saudi Arabia and is opening a medical-equipment manufacturing plant there.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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