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Will GE sell its $1.2bn motors business to Johnson?

01 March, 2003

There are reports that General Electric might soon sell its electric motors business to Hong Kong-based Johnson Electric Holdings. If the deal goes ahead, it will more than double the size of Johnson`s business.

GE has reportedly been looking for buyers for its $1.2bn motors operation, and is seeking $750-900m for the business, which is part of its industrial systems division. Speculation that Johnson might be the buyer became so intense in February that its shares were suspended on the Hong Kong stock exchange.

Johnson subsequently issued a statement revealing that it had made "a preliminary expression of interest to consider a US motor business for possible investment". It added that it was part of its normal course of business to consider numerous opportunities, and warned that "a significant majority of such potential opportunities … do not result in a transaction being concluded".

Johnson employs more tnan 30,000 people in 14 countries, and has factories in ten countries. It specialises in small motors for applications such as office equipment, appliances, vehicles and power tools. I produces more than 2.5 million motors a day and has the capacity to produce 3 million day - or 1,000 million motors a year. The company expects to overtake Mabuchi Motor to become the world`s largest independent manufacturer of small motors within two years.

In the year to March 2002, Johnson Electric`s sales amounted to $774m. In 1999, it bought the Lear Corporation`s automotive electric motors business for $310m.

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