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GE has announced plans to offer at least $12 billion of common stock to the public. The underwriters will have a 30-day option to purchase shares representing an additional 15% of the offering amount from GE to cover over allotments.

In addition, GE has reached an agreement to sell $3 billion of perpetual preferred stock in a private offering to Berkshire Hathaway Inc. The perpetual preferred stock has a dividend of 10% and is callable after three years at a 10% premium. In conjunction with this offering, Berkshire Hathaway will also receive warrants to purchase $3 billion of common stock with a strike price of $22.25 per share, which is exercisable at any time for a five-year term.

"This action does two things for GE investors," says GE CEO Jeff Immelt. "First, it enhances our flexibility and allows us to execute on our liquidity plan even faster. Second, it gives us the opportunity to play offense in this market should conditions allow. In addition, we remain committed to the Triple A rating, and in the recent market volatility, we continue to successfully meet our commercial paper needs."

Goldman Sachs & Co. is the bookrunner for the transaction. GE expects that Banc of America Securities LLC, Citi, Deutsche Bank Securities, J.P. Morgan and Morgan Stanley will be added as additional bookrunners.

SOURCE: General Electric



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