General Electric is breaking up into three companies, one of which will have a renewed focus on growing in healthcare.
Four details:
- GE Healthcare is pursuing tax-free status by early 2023 as it focuses on precision medicine and clinical challenges, according to a Nov. 9 news release. GE Chair and CEO H. Lawrence Culp Jr. will serve as chair of GE Healthcare. Peter Arduini will serve as president and CEO, effective Jan. 1.
- Breaking the company into three, with the other two companies focused on aviation and energy, will allow each company to have a dedicated board of directors, tailored capital allocation decisions and a deeper focus on meeting customer needs, according to the release.
- GE said its healthcare business plans to differentiate itself by offering diagnostics, therapy planning and digital health. GE Healthcare will also focus on its equipment business in higher-margin services. Its healthcare offerings serve more than 1 billion patients and are involved in more than 2 billion procedures each year, according to the release.
- When the spinoffs are finalized, GE plans to retain a 19.9 percent stake in GE Healthcare. GE expects the healthcare spinoff to issue debt securities, the proceeds of which will be used to pay down outstanding GE debt.