Storied US company General Electric will split itself into three public companies focused on aviation, healthcare and energy.
Founded in 1892, the company has reshaped itself in recent years from the huge conglomerate created by Jack Welch in the 1980s to a much smaller and focused entity. It was badly damaged by the financial crisis.
The company said Tuesday that it will shut down its healthcare business in early 2023. The healthcare business is its third largest segment – manufacturing of diagnostic imaging systems including magnetic resonance, X-ray, digital mammography and nuclear imaging. GE also said it would shut down its energy segment — which includes its renewable energy, electricity and digital businesses — in early 2024. It will maintain 19.9% stake in the health unit.
“By creating three industry-leading, global public companies, each client, investors and employee can benefit from greater focus, tailored capital allocation and strategic flexibility to drive long-term growth and value for President and CEO Lawrence Culp Jr. Statement.
FILE – The General Electric (GE) logo displayed on a smartphone is seen in this photo illustration. (Photo Illustration by Raphael Heinrich/SOPA Images/LightRocket via Getty Images)
Kalp will become the non-executive chairman of the healthcare company. Peter Arduini will serve as President and CEO of GE Healthcare effective January 1, 2022. Scott Strazik will become CEO of the combined renewable energy, electricity and digital business. Culp will lead the aviation business with John Slattery as its CEO.
Aviation is the most profitable part of GE’s business. The company produces jet engines, aerospace systems, replacement parts and maintenance services for commercial, executive and military aircraft, including fighters, bombers, tankers and helicopters.
The company expects approximately $2 billion in one-time separation, transition and operating costs related to the divestiture, which will require board approval.
In 2015, GE announced a radical overhaul of the company, vowing to reduce billions in assets to better focus on the company’s industrial core, namely power, aviation, renewable energy and healthcare.
The Boston company also announced Tuesday that it expects to reduce its debt by more than $75 billion by the end of the year.
Shares jumped more than 8% before the market opened.