It seems the Department of Justice investigation into private equity club deals may have prompted General Electric Co. to forbid consortium offers in the auction of its $7 billion plastics business. The news of the auction's terms first appeared in a report from the Wall Street Journal (subscription only). The conglomerate, which has been divesting its slow growth businesses since CEO Jeffrey Immelt took over in 2000, has hired Goldman Sachs Group Inc. to manage the auction. The news that PE firms can not band together to buy the unit puts them at a disadvantage considering there are a large number of possible strategic bidders including Dow Chemical Co., BASF AG and Saudi government-owned Saudi Arabian Basic Industries Corp. Nonetheless, the auction's terms may not keep Apollo Management LP from entering the fray, because the New York buyout firm has made two plastics acquisitions in the last 18 months, according to The Deal. —Matthew Wurtzel
See story from The Deal
See story from The Wall Street Journal (subscription required)
See PE club Dealwatch
Continue reading below
