New York, December 21, 2012 -- Moody's Investors Service said that today's announcement by General Electric Company (GE, Aa3 stable) that it intends to purchase Italian engine sub-system provider Avio SpA (unrated, with an approximate 14% ownership stake held by Finmeccanica SpA, Baa3 stable) for EUR3.3 billion in cash will not impact the company's ratings. The purchase price is above the company's previously articulated $1 billion to $3 billion range for targeted 2013 acquisitions, and in conjunction with expected large upcoming pension funding requirements (beginning in 2014) and recently announced shareholder return initiatives is viewed as a credit negative. Nevertheless, Moody's acknowledged the potential longer term benefits of the acquisition proforma for its assumed successful completion in terms of the enhanced business profile and more vertically integrated market position of GE Aviation--already the leading global aircraft engine manufacturing company. Moreover, Moody's anticipates that GE will be able to fund the acquisition without any incremental debt or long-term diminution of its liquidity as the acquisition funding should coincide with the anticipated 2013 special dividend(s) from finance subsidiary General Electric Capital Corp. (A1 stable). Accordingly, the rating is unaffected at this time.

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