Analysts: GE's removal of CEO could jeopardize spinoff of healthcare unit

After General Electric abruptly removed John Flannery from his roles as chairman and CEO Oct. 1, industry analysts are saying the company's plan to spin off GE Healthcare may no longer be certain, CNBC reports.

In June, GE revealed plans to separate its healthcare business into a standalone enterprise. The healthcare unit generated 15.8 percent of GE's total sales and 43.2 percent of its total operating profit in 2017.

CFRA research equity analyst Jim Corridore told CNBC that Lawrence Culp, the former CEO of Danaher who will take over for Mr. Flannery at GE, may decide whether the company follows through on its plans to spin off the healthcare entity.

"Maybe healthcare is not going to get spun off now," Mr. Corridore told CNBC. "Maybe some of the parts that were going to be sold make more sense today."

A GE Healthcare spokesperson said the unit "plans to continue working toward separation of GE" and Mr. Flannery's removal "does not change what's happening at GE Healthcare." GE also said it remains "committed to establishing healthcare as a separate independent entity."

Mr. Flannery's removal reportedly stemmed from the board's frustration with the slow pace of change under his leadership, sources familiar with the matter told CNBC.

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