Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 8, 1995 TAG: 9508080093
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE:
DATELINE: DETROIT LENGTH: Short
For GM, shedding the company it bought for $2.5 billion from billionaire Ross Perot in 1984 would accomplish two aims, analysts said. GM's underfunded pension fund, which holds 30 percent of EDS stock, will be strengthened as EDS holders gain ownership rights and the shares rise in value.
The spinoff, expected in the first half of 1996, also will let GM focus more on building cars and trucks and squeezing more profit from each vehicle.
``It's an emphasis by GM on concentrating on their core product, rather than trying to be profitable in a variety of different businesses,'' said Lincoln Merrihew, a consultant with DRI/McGraw Hill.
GM Treasurer Heidi Kunz said it was ``fair to say that GM has determined that EDS is not a core holding, not a core strategic asset.''
The Plano, Texas-based company, founded by Perot in 1962, installs and manages computer databases and networks. It is the second-largest computer-services company after International Business Machines Corp.
- Bloomberg Business News
by CNB