In an interview last year, Pamela Daley said that the M&A team at General Electric Co. (NYSE:GE) was spending more time thinking about joint ventures. It's becoming increasingly clear what Daley, GE's senior vice president for corporate business development, was talking about.
Speaking in India Thursday, CEO Jeff Immelt confirmed for the first time that GE is having discussions about a deal for its 80%-owned NBC Universal unit. The possibilities include doing an IPO and, reportedly, spinning it off into a joint venture with cable king Comcast Corp. (NASDAQ:CMCSA). The Deal Pipeline subscribers can find more details
here.
And what brought Immelt to India? He was there to announce the amplification of another JV, to be achieved by selling the local business units of GE Healthcare -- the $17 billion division that is one of Immelt's biggest bets -- to Wipro GE Healthcare, an existing venture the company has with Indian technology giant Wipro.
But if the possible Comcast deal and the announced Wipro transaction employ similar vehicles, the strategic intent is quite different.
The Indian deal is about growth -- both in India's own healthcare market, and also in the rest of the world, including the U.S. As The New York Times reported, Immelt
envisions the venture a pioneer in lowering the costs of things like ultrasound scanners, fetal monitors and cardiology monitors, as well as the software and servicing associated with those machines.
"In five years 50% to 75% of GE Healthcare products will be made in India," Immelt said,
according to India's Economic Times. And India won't just be exporting the gear. Indian technicians will also be handling tasks like interpreting CT scans, reading X-rays and scheduling nursing visits.
Meanwhile the NBCU-Comcast JV, if it happens, will be about GE exiting a business that no longer looks like such a good fit, but doing so in a way that doesn't require Comcast to put up too much cash.
Indeed, the proportions of the possible deal and the actual one may say it all: Wipro-GE Healthcare, which is 19 years old, is 51% owned by GE, 49% by Wipro. The reported shares in a possible Comcast deal would be 49% GE, 51% Comcast.
Daley made her comments about joint ventures, by the way, when we spoke to her on the occasion of GE winning in the industrials category in our 2008 Most Admired Corporate Dealmakers survey. You'll find the resulting article about corp dev at GE
here.
And you can vote in this year's MACD survey
here. -
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