General Electric Co. said on Monday it had agreed to sell its struggling GE Plastics business to Riyadh-based chemicals company Saudi Basic Industries Corp. in an $11.6 billion cash deal.
GE placed the Plastics unit, where profit last year slipped 22 percent to $674 million, on the block in January. GE Plastics last year generated $6.65 billion in revenue.
GE said it would receive net after-tax proceeds of about $9 billion, which would primarily be put toward the company's current stock buyback.
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The Fairfield, Connecticut-based conglomerate decided to sell the slow-growing plastics business as part of its effort to focus on faster-growth industries. It said it was putting plastics up for sale after starting the year by negotiating $15 billion in takeovers, including parts of health-care company Abbott Laboratories Inc., the aerospace business of Britain's Smiths Group Plc and privately held oil and gas field equipment maker Vetco Gray.
"This transaction is another important step in the execution of this strategy, which has created a faster-growing, higher-returning set of businesses capable of delivering sustained performance," GE Chairman and Chief Executive Jeff Immelt said in a statement.
GE shares have lagged the major U.S. stock indexes for the past few years. As of Friday's close, they were down 0.7 percent for the year, at a time when the Dow Jones industrial average, of which GE is a component, was up 8.8 percent, at a record high.