US giant GE keen to make more NZ acquisitions

United States industrial and financial conglomerate GE has been an active buyer of New Zealand businesses this year and more acquisitions are in the pipeline, says Steve Sargent, the company's chief executive for Australia and New Zealand.

GE, which is ranked by Fortune magazine as the sixth-biggest US company, recently announced that it had bought South Island technology firm Commtest, in which failed finance company South Canterbury Finance had a holding, for an undisclosed sum.

Commtest makes vibration analysis and monitoring equipment to detect early signs of impending machine failure so replacements or repairs can be made before a breakdown occurs.

Earlier in the year, GE picked up part of South Canterbury Finance's loan book in the form of Face Finance.

"The [acquisition] pipeline is fairly full at the moment," Sargent said.

A number of deals, involving GE's capital business and its industrial divisions in New Zealand and Australia, were being reviewed on a weekly basis, he said. GE was not looking at other distressed assets similar to those picked up from South Canterbury. "We see this as a fairly vibrant market. It is a market that we like and are continuing to invest in across the board."

Considering its size, GE has had a low profile in New Zealand. Its local operations, with annual revenue of around $650 million, would rank it as one New Zealand's bigger companies.

GE Capital - GE's largest New Zealand business - is the country's fifth-biggest lender, after the so-called "big four" Australian banks, and well ahead of state-owned Kiwibank.

In financial services, Sargent said GE Capital was looking to aggressively grow its corporate finance and consumer finance businesses.

Since the end of the New Zealand finance company meltdown three years ago, GE Capital had enjoyed double-digit lending growth, filling the void left by the dozens of companies that went to the wall.

Globally, Sargent said GE had recognised that growth in the US and Europe would be slow over the next few years, and was shifting its focus to other markets where the company considered it could achieve above-trend growth such as China, India, Southeast Asia, Australia, New Zealand, the Middle East, North Africa and Latin America.

About 60 per cent of GE's business is outside North America, and Sargent said the trend of less reliance on its home market was one that was likely to accelerate over time.

GE worldwide is mostly an industrial business, but in New Zealand, its main business is GE Capital, through which it has customer financing relationships with electronics retailers Harvey Norman and Noel Leeming, jewellery chain Michael Hill International and Trade Me.