Shares in Cree (Nasdaq: ) surged 9.5 percent on Friday after Bloomberg News reported that manufacturing giant GE is considering buying the Durham-based company.

Cree is at the forefront of the emerging light-emitting diode market.

Traditional lighting has been a longtime big seller for GE.
Shares in Cree closed at $26.66, up $2.30 or 9.47 percent. The climb continued in after-hours trading as buyers drove up the share price to $27.
Daniel Gelbtuch, an analyst at CIBC World Markets, told that a GE deal for Cree makes sense.

“GE is definitely in a position where if they plan on being in the lighting business in the long-term, they’ll have to fill out their LED portfolio,” Gelbtuch said. “And the only piece left is to acquire Cree.”

Bloomberg first reported the GE rumors Friday morning.

“There’s takeover chatter with GE, and that’s all I’m seeing,” said Mario LoGrande, a trader at Caris & Co. in New York. “The calls are active so people may be speculating that there’s potential for a takeover.”

Cree had no comment on the possible takeover.

However, Bloomberg did note that GE already has a working relationship with Nichia Corp., a Cree rival in Japan.

Cree recently announced plans to triple its LED manufacturing capability in China.

LEDs are emerging as an alternative to traditional lighting, with the ability to last much longer, consume less energy and produce less heat.

Cree was founded by six university students at North Carolina State University 20 years ago. Three of the founders are still with the company.