General Electric Co could spend up to $30 billion on takeovers over the next two to three years, a top executive said, in a sign the conglomerate is coming out of its recessionary defensive crouch.

But John Rice, one of four vice chairman of the largest U.S. conglomerate, cautioned that the number he described as $30 billion-ish is not a commitment to spending. It would be compatible, he said, with GE's plans to boost its dividend and buy back more shares, including the preferred stake it sold to Warren Buffett's Berkshire Hathaway Inc in October 2008 during the credit crisis.

That doesn't mean that we'll spend that money; it doesn't mean that we won't do more with the dividend or with the buyback, Rice, who heads the company's technology infrastructure unit, told an investor conference in New York.

If we were to conclude that there aren't the deals out there that make sense, we might do less than that. We're not going to chase bad deals just so that we can say we spent 'X' billion on M&A, he said.

The statement, which surprised some investors, was the latest sign that mergers are coming back in a big way in corporate America, after a few years when companies were more concerned about conserving their cash.


GE has been more of a seller than a buyer of late. It is in the process of selling a majority stake in its NBC Universal media business to No. 1 U.S. cable operator Comcast Corp , and has also recently signed deals to sell its security unit to United Technologies Corp and its BAC-Credomatic Central American banking group to Colombia's Grupo Aval .

Rice's words could signal a change in direction.

That is kind of a sea change from what they've been talking about, because most of the things have been (joint ventures), where they're leveraging it with others and they're really conserving capital, said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors in Cincinnati.

One of the issues up until just the past couple of quarters has been the talk about was there going to be enough liquidity, was there going to be enough capital left over for investment given that they were winding down or right-sizing GE Capital, were they stealing capital from the other businesses to be able to sustain that business?

GE spent much of the past few years jealously guarding its cash as it rode out a brutal downturn that shook its hefty finance arm. But things have changed since the company broke a nine-quarter streak of profit declines in the second quarter.

The world's largest maker of jet engines and electric turbines said in July that it would raise its dividend -- which it had slashed during the recession -- by 20 percent starting in the third quarter, a move that came earlier than Wall Street had expected.

GE also said it would resume buying back its shares, a practice it had suspended in September 2008. The board has authorized a buyback of up to $11.6 billion of shares.


Global takeover activity has spiked upward in recent weeks, with last month going down as the busiest month for acquisitions in at least four years.

Just this week blue-chip manufacturer 3M Co agreed to pay $943 million for Cogent Inc , a maker of identification systems used to screen travelers at border crossings, and $230 million for Israel's Attenti Holdings SA, which makes systems used to monitor criminals and elder care patients.

Also on Wednesday, the head of United Technologies said the world's biggest maker of elevators and air conditioners is interested in stepping up its pace of acquisitions, though it is having a hard time agreeing on prices with potential targets.

We've got a nice pipeline of M&A still, but I would say there's a substantial disconnect between sellers' expectations and me as a buyer, Chief Executive Louis Chenevert said.

GE shares were up 3.8 percent at $15.03 in midday trading on the New York Stock Exchange, amid a broad rally in U.S. shares driven by investor relief after a report showed that the manufacturing sector grew faster than investors expected in August.

(Reporting by Scott Malone; Editing by Gerald E. McCormick, Matthew Lewis and Steve Orlofsky)