GE 2BPresentation 2B Group 2B8

PRESENTATION TO GENERAL ELECTRIC

Team 8
January 25, 2013
Consulting

Agenda
Executive Summary

Page
4

General Electric Overview

Page
6

Economy and Outlook

Page
11

Valuation Considerations: Fracking

Page
17

Potential Exit Strategies & Risk Assessment

Page
22

2

EXECUTIVE SUMMARY

3

Executive Summary
Overview

South
Africa
Overview
Industry
Update
Strategic
Initiative
Assessme
nt
Our
Perspect ive 

General Electric has requested a prospective review of potential foreign direct investment opportunities



Included are perspectives on a potential investment in Hydraulic Fracturing in
South Africa



Country currently dependent primarily on coal for energy



South Africa is starting to see economic growth pick up, 3.8% annualized growth in Q4




Karoo region is ripe for fracking to drive industrial growth and diversify energy sources
Generated $8.0bn in Revenue



5.8% annual growth from 2008-2013 in the Fracking market



The Hydraulic Fracturing market is expected to grow to $15.5bn in the US alone by 2018

Determine appropriate course of action
 Acquire Fracking License


Start-up costs and NPV analysis



Potential exit opportunity analysis



General Electric should pursue a Hydraulic Fracking operation in the Karoo region of South Africa, where massive profits can be had



The company could then pursue a sale of the venture, or spin-off the venture to lock in profits while maintaining a stake in the business
4

GENERAL ELECTRIC COMPANY OVERVIEW

5

General Electric Company Overview
Background & Strategic Positioning
 General Electric’s eight business units generated a combined revenue of $146.0bn in
2012
 The Company employs 307,000 employees worldwide and manufactures products across 170 countries
 The majority of revenues come from the Financing and Power & Water Segments, accounting for 47.1% of total revenue
 The Company’s has focused on simplification of the business, divesting non-core assets and focusing on growth in