General Motors Corporation announced on Thursday that it will sell its Allison Transmission commercial and military business for about $5.6 billion to the private equity firm The Carlyle Group and Canada's Onex Corp.
General Motors shares went up by 2 percent during morning trading.
General Motors plans to raise money and focus on its core business as its competitors in North America, particularly Asian automakers had expand their business and conquer rather big market share.
General Motors had said in January it was planning to sell Allison.
General Motors plans to sell seven manufacturing plants in Indianapolis and its global distribution network and sales offices, and to keep a production facility in Baltimore, which produces conventional and hybrid transmissions for pickup trucks and sport utility vehicles.
General Motors said the deal is expected to be completed in the third quarter after it gets industrial union and regulatory approval.
GM Chairman and Chief Executive Officer Rick Wagoner said:"This is another important step to strengthen our liquidity and provide resources to support our heavy investments in new products and technology." He added: "At the same time, this sale will position Allison for growth with strong partners in Carlyle and Onex, which have well-established track records of working effectively with their management teams, unions and employees."
GM said last month that the unit had 2006 revenue of about $2.2 billion and an operating profit of $338 million.
The Carlyle Group
Established in 1987, The Carlyle Group is a private global investment firm that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings.
Today the Carlyle Group is one of the world’s largest private equity firms, with more than $58.5 billion under management. With 51 funds across four investment disciplines (buyouts, venture & growth capital, real estate and leveraged finance), Carlyle combines global vision with local insight, relying on a top-flight team of more than 400 investment professionals operating out of offices in 18 countries to uncover superior opportunities in North America, Europe, Asia, Australia and Africa.
While open to opportunities wherever they can be found, Carlyle focuses on sectors in which it has demonstrated expertise: aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, infrastructure, real estate, technology & business services and telecommunications & media.
Carlyle’s team of investment professionals includes 169 M.B.A.s, 28 J.D.s and 11 Ph.D./M.D.s from many of the world’s most prestigious universities.
Carlyle’s conservative investment philosophy and disciplined investment process has generated extraordinary returns for its investors. Since its founding in 1987, the firm has invested $28.3 billion in 636 transactions.
More than 1,000 investors from 61 countries entrust Carlyle with their capital and their reputations. As one means of aligning its own interests with those of its Limited Partner investors, Carlyle has committed more than $2.1 billion of its own capital to its funds. – Alla Harutyunyan for HULIQ.COM
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