Industrial giant General Electric (GE) has agreed to sell its plastics division to Saudi Basic Industries Corporation for $11.6bn.

The deal, which should be completed during the third quarter of 2007, is one of the biggest in Saudi Basic's corporate history.

Saudi Basic, known as Sabic, is the largest public company in the Middle East and one of the world's top 10 largest petrochemicals manufacturers.

"Over the past five years, we have transformed our portfolio of businesses through smart dispositions and investments in higher-growth, higher technology businesses," GE chairman and chief executive Jeff Immelt said.

"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."

He added: "This sale is the right move at the right time for GE shareowners. We received a good price from a respected global company in a highly competitive bidding process."

Jeff Immelt, GE: "This sale is the right move at the right time for GE shareowners. We received a good price from a respected global company in a highly competitive bidding process."

The sale will generate an approximate after-tax gain of $1.5bn.

GE, the world's second-largest company, said it would use the proceeds from the deal to increase its planned 2007 stock buyback program and fund restructuring across its businesses.

Mohammed Al-Mady, vice chairman and chief executive of Sabic, said: "This acquisition of GE Plastics represents another step in Sabic's growth and diversification to become one of the world’s leading manufacturing companies.

"GE Plastics is a high-quality organization with a great tradition at GE and it brings people, products and technology of significant value for our customers and our growth.

"It is a good addition for us and an important business relationship. The deal brings us a new market and 30,000 important customers worldwide."

GE Plastics is a $6.65bn global supplier of plastic resins widely used in automotive, healthcare, consumer electronics, transportation, building and construction, telecommunications, and optical media.

It is headquartered in Pittsfield and employs more than 10,000 people in 60 locations.

Brian Gladden, who currently serves as vice president of GE Plastics' resin business, will be president and chief executive officer of the new business, which will be renamed upon completion of the transaction.

The article Saudi firm buys GE Plastics originally appeared on 999 Today