General Electric, have announced their plans to sell a majority holding in a lesser known solar energy business BlackRock Inc. giving the investment giant a larger footing in an emerging market as the ailing manufacturer looks to shift their investments in other sectors. Details after the pullout have explained that a fund managed by BlackRock’s Real Assets sector, will now be the owner of 80% of Distributed Solar Development, a new company that has been created from GE Solar. Financial terms have yet to be disclosed on the new venture, however a spokesperson for GE said that information will be made available over the next few weeks.
The agreement between BlackRock will further increase GE’s attempt at streamlining the company, as CEO Larry Culp is instilling plans to rescue the company by narrowing down the many focuses the company have, and increasing their moves into the aviation, gas, and wind energy sectors. The American giant are currently using mergers to exit their positions in the oil and locomotive markets, and a spokesman has said the company are evaluating strategic operations for their venture capital operations. GE solar, a primarily consultation business with between 50 and 60 employees have been under the wing of GE since 2012. The offshoot of the company does not actually produce solar panels, and focus on creating solutions for solar and storage within the commercial and public sectors. GE originally tested the waters of solar panel manufacturing, however sold its technology to First Solar Inc. in 2013.
With the news that GE have reached an agreement with BlackRock, the company saw shares fall 1.5% down to $10.23 while BlackRock also saw a slide of 1.5% down to $470.13. BlackRock’s Real Assets unit, currently have over $50 billion USD in client commitments, and started their renewable energy sector in 2012.The deal between the BlackRock and GE comes at a time where investors are prioritizing the solar segment after initially being a more riskier segment for the company. Part of the move by investors is down to the fact that smaller solar farms can offer potential returns 2% higher than that of larger sized projects.
Damien Wright – Walter International