From GE:

GE Commences Exchange Offer to Complete Separation of Synchrony Financial

October 19, 2015

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FAIRFIELD, Conn. – October 19, 2015 – GE (NYSE: GE) today commenced an offer to exchange GE common stock for common stock of Synchrony Financial (NYSE: SYF) presently owned by GE. This exchange offer is in connection with the previously announced separation of Synchrony, the largest provider of private label credit cards in the United States*, from GE. The exchange offer is expected to conclude the week of November 16, 2015.

Last week, Synchrony Financial received approval from the Federal Reserve to become a stand-alone savings and loan holding company following the completion of the exchange offer. In the exchange offer, or split-off, GE shareholders will have the option to tender for exchange some, none, or all of their shares of GE common stock for shares of Synchrony. GE shares tendered and accepted for exchange will reduce the outstanding shares of GE.

The separation of Synchrony Financial is consistent with GE’s stated strategy of focusing on its industrial core and reducing the size of its financial businesses. The separation reduces the systemic footprint of GE Capital and will allow Synchrony to operate as a stand-alone company and pursue a long-term strategy that is focused only on its own business objectives.
 

“The Synchrony exchange is an important part of GE’s transformation into a simpler, more focused company,” said GE Chairman and CEO Jeff Immelt. “We expect the exchange will reduce the outstanding float of GE common stock by 6%-7%, and if fully subscribed, would represent the equivalent of about $18 billion-$21 billion in GE stock buyback, subject to the relative performance of GE and Synchrony stock prices. With the launch of today’s exchange offer and progress to-date on the GE Capital Exit Plan, we are on track to return more than $90 billion to investors from 2015 to 2018 with more than 90% of our earnings coming from high-return industrial businesses.”

Key Elements of the Exchange Offer

The exchange offer is designed to provide GE shareholders an opportunity to exchange their shares of GE common stock for shares of Synchrony common stock at a 7% discount, subject to an upper limit of 1.1308 shares of Synchrony common stock per share of GE common stock. If the upper limit is not in effect, for each $100.00 of shares of GE common stock accepted in the exchange offer, tendering shareholders would receive approximately $107.53 of Synchrony common stock.

The final exchange ratio will be announced in a press release to be issued by 9:00 a.m., New York City time, on November 13, 2015, unless the exchange offer is extended or terminated. It will be based on the per-share values determined by the average of the daily volume-weighted average prices (“VWAPs”) for GE and Synchrony common stock for the three consecutive trading days ending on and including the second trading day preceding the expiration date of the exchange offer, currently expected to be November 10, 11 and 12, 2015. The final exchange ratio, when announced, and a daily indicative exchange ratio beginning at the end of the third day of the exchange offer period, will be available atwww.edocumentview.com/GEexchange.

The exchange offer is expected to be tax-free to participating shareholders for U.S. federal income tax purposes, except in respect of cash received for fractional shares. The completion of the exchange offer is subject to certain conditions, including: the distribution of at least 634,743,750 shares of Synchrony common stock in exchange for shares of GE common stock tendered in the exchange offer; the private letter ruling from the Internal Revenue Service remaining in effect as to certain issues relating to, and GE receiving an opinion from tax counsel confirming, the tax-free treatment of the split-off and pro rata spin-off, if any, to GE and its shareholders; and the Federal Reserve Board’s prior approval of the Synchrony application to become a standalone savings and loan company and to retain control of Synchrony Bank, a subsidiary of Synchrony, following separation from GE continuing to be effective, among other things.

GE owns 705,270,833 shares of Synchrony common stock, which represent approximately 84.6% of the outstanding common stock of Synchrony. Since the exchange offer is subject to proration if it is oversubscribed, the number of shares of GE common stock that GE accepts in the exchange offer may be less than the number of shares tendered.

The exchange offer will be available for at least 20 business days and is currently scheduled to expire at 12:00 midnight, New York City time, at the end of the day on November 16, 2015 unless extended or terminated.

Advisors

Goldman, Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC will serve as the dealer managers for the exchange offer.

About GE

GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the "GE Store," through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com

*Source: The Nilson Report (April, 2015, Issue # 1062) - based on 2014 data.