GE to Spin Off Healthcare Business
Posted July 3, 2018
GE Healthcare, the $65-billion division of General Electric (GE) known for its expertise in medical imaging, monitoring, biomanufacturing, cell therapy, artificial intelligence, and data analytics, is spinning off from its 126-year-old parent company. The healthcare business unit generated more than $19 billion in revenue last year, but the separation will allow for a "simpler" and "leaner" GE moving forward, according to the company.
“GE Healthcare is an industry leader with financial strength, global scale and cutting-edge technology. Our talented healthcare team will continue delivering precision health solutions, building on our heritage of technology innovation that delivers patient outcomes,” said John Flannery, chairman and CEO of GE, in a statement. “We are confident that positioning GE Healthcare … outside of GE’s current structure is best not only for GE and its owners, but also for [this business].”
The separation process is expected to take 12–18 months, according to GE. The company will first sell 20% of its healthcare business to generate cash and then distribute the remaining 80% to GE shareholders on a tax-free basis. The resulting GE Healthcare company will retain its current president and CEO, Kieran Murphy.
“GE Healthcare’s vision is to drive more individualized, precise, and effective patient outcomes. As an independent global healthcare business, we will have greater flexibility to pursue future growth opportunities, react quickly to changes in the industry and invest in innovation,” said Murphy, in a statement. “We will build on strong customer demand for integrated precision health solutions and great technology with digital and analytics capabilities as we enter our next chapter.”
GE, which was founded in 1892, was the last remaining original member of the Dow Jones Industrial Average until it was replaced by Walgreens Boots Alliance in June. The company has been working to streamline its business, already selling off a large portion of its assets, including appliances. GE says it will continue as an “aviation, power, and renewable energy company.”