GE sells unit, ups dividend and buyback

[notiCIas]

GE sells unit, ups dividend and buyback

Conglomerate sees faster earnings growth for '06 after selling Insurance Solutions for $6.8 billion.

November 18, 2005: 5:48 AM EST

NEW YORK (Reuters) - General Electric, which announced that it was selling most of its Insurance Solutions business to Swiss Re for $6.8 billion on Friday, said it now expects faster earnings growth in 2006 and will increase its dividend and stock buyback plan.

The conglomerate said it now expects earnings, excluding the insurance business, in the range of $1.92 to $2.02 a share for 2006, up 12 percent to 17 percent from its current forecast for 2005. The company had previously forecast 10 percent to 15 percent growth.

GE also said it will raise its quarterly dividend 14 percent to 25 cents a share. It will increase its stock repurchase program to $25 billion through 2008, up from its previous plan to buy back $15 billion in stock through 2007.

Swiss RE, the world's second-largest reinsurer, said it aimed to raise up to $7.5 billion in new capital to finance the deal, including up to $5.5 billion in shares and mandatory convertibles.

GE was expected to hold in excess of 10 percent of Swiss Re's shares as a result of the deal, Swiss Re said.