GE, Abu Dhabi investment co. form ventures

The deal with Mubadala Development Co. will also launch or broaden several other ventures with the Persian Gulf investment vehicle, which expects to become one of the top 10 institutional investors in GE, whose businesses include light bulbs, jet engines and NBC television.

In a joint statement Tuesday, Fairfield-based GE and Mubadala said they are aiming to capitalize on strong growth opportunities in the Middle East and around the globe. The agreement provides for shared capital commitments to new joint ventures and investment funds.

"I think there's no shortage for opportunities that the joint venture can focus on," Jeff Immelt, GE's chief executive, told news reporters in a conference call.

Mubadala, based in Abu Dhabi, the capital of the United Arab Emirates, could eventually own about 120 million GE shares, which would be valued at close to $3.4 billion at current market prices, analyst Nicholas Heymann of Sterne Agee said in an investor note.

By entering into investments with a well-capitalized Middle East partner, "GE has effectively found new demand for its shares during a particularly challenging earnings period for financial services companies," Heymann said.

GE shares have tumbled by nearly 23 percent since April 11, when it announced first quarter earnings guidance that widely missed Wall Street expectations. By comparison, the Dow Jones Index has dropped by about 9 percent.

GE said at the time that it was unable to complete asset sales due to tighter credit markets. And Immelt said the near-collapse of the Wall Street investment firm Bear Stearns Cos. also hurt the performance of GE's commercial financing business.

Heymann said the deal helps GE spread its risk in financial services.

"You move more outside the U.S. into emerging markets where there's presumably more growth," he said in an interview.