How Will GE Spend Its Plastics Units Proceeds?

Bloomberg reports that General Electric wants to use the $10 billion or so it nets from selling its plastics unit to buy healthcare technology developers and energy service and equipment makers in order to tap into faster-growing markets. Analysts say potential healthcare targets include instrument maker Waters Corp., software makers Vital Images Inc. and Allscripts Healthcare Solutions Inc., genetic analysis company Illumina Inc. biotech researcher Invitrogen Corp., Cerner Corp. and Eclipsys Corp. Energy possibilities include oilfield-equipment makers Cameron International Corp., FMC Technologies Inc. and Dril-Quip Inc. Merrill Lynch said in a note today that GE may spend tens of billions of dollars on an acquisition. Shares of ABB Ltd., the world's largest electricity network builder and Schneider Electric SA, the biggest supplier of circuit breakers, were up about 2.5% on speculation the two European companies might be targets. Sub-sea drilling may be interesting sector, after GE agreed to buy this week drilling-equipment maker Vetco Gray Inc. for $1.9 billion. GE declined to comment.

• Sources: Bloomberg
• Related commentary: GE Plastics Unit Sale -- Subject to Restrictions, GE to Buy Vetco's Oil & Gas Unit for $1.9 Billion, GE and Citigroup Rallies: How Wall St. Missed It, General Electric: Financial Company Dressed in the Bond Rating of an Industrial Conglomerate. Conference Call Transcript: General Electric Q3 2006
• Potentially impacted stocks and ETFs: General Electric Co. (GE), Waters Corp. (WAT), Vital Images Inc. (VTAL), Allscripts Healthcare Solutions Inc (MDRX), Illumina Inc. (ILMN), Invitrogen Corp. (IVGN), Cerner Corp. (CERN), Eclipsys Corp. (ECLP), Cameron International Corp. (CAM), FMC Technologies Inc. (FTI), Dril-Quip Inc. (DRQ), ABB Ltd. ADR (ABB)

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