GE says conglomerate to split into three companies

Multi-national conglomerate General Electric announced Tuesday it will split into three separate companies each listed on the stock exchange, specializing in aviation, healthcare and energy.

The storied Boston-based company said the split will leave the independently run businesses better positioned to “deliver long-term growth and create value” for customers, investors and employees.

In a statement, General Electric said it would spin off GE Healthcare in early 2023, with GE expecting to retain a 19.9 percent stake.

It would then combine three divisions—GE Renewable Energy, GE Power, and GE Digital—into a single business that will be spun off in early 2024.

The remaining core of the company, which well retain the name General Electric, will focus on aviation.

“Today is a defining moment for GE, and we are ready,” said company chairman and chief executive Lawrence Culp, who will retain a leadership role in the new aviation group.

“By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees,” he said.

“The momentum we have built puts us in a position of strength to take this exciting next step in GE’s transformation and realize the full potential of each of our businesses.”

Investors embraced the news. On Wall Street, GE stock jumped more than seven percent to $116 in electronic trading ahead of the market’s opening bell.

Founded at the end of the 19th century by Thomas Edison, General Electric has long been a flagship of American industry, with a sprawling presence in many sectors, from electricity transmission to finance, media and computers.

Hard hit by the 2008 financial crisis, the company has undergone multiple downsizing and restructuring efforts and incurred massive debt in recent years.

Last month, GE reported fairly satisfactory quarterly results, benefiting in particular from strong growth in its aviation revenues.

© 2021 AFP