GE split includes healthcare spinoff

General Electric is breaking up into three companies, one of which will have a renewed focus on growing in healthcare.

Four details:

  1. 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.

  2. 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.

  3. 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.

  4. 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. 

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