GE spins off healthcare unit as part of simplification push
GE is spinning off its healthcare unit and divesting its stake in oilfield services company Baker Hughes in a bid to simplify the business.
The 126-year-old company plans to focus on the areas of aviation, power and renewable energy moving forward. The move is part of GE’s plan to shrink its size by cutting back its offerings, and comes just days after the conglomerate was booted from the Dow Jones Industrial Average. It has since been replaced by Walgreens.
“Today marks an important milestone in GE’s history. We are aggressively driving forward as an aviation, power and renewable energy company—three highly complementary businesses poised for future growth,” said John Flannery, chairman and chief executive of GE, in a statement. “We will continue to improve our operations and balance sheet as we make GE simpler and stronger.”
Kieran Murphy, president and chief executive of GE Healthcare, will continue to lead business as a standalone company. According to GE, its healthcare business brought in more than $19bn in revenues in 2017 and posted 5% revenue growth in the same year.
GE Healthcare has released a number of innovations in recent years, ranging from a mammography machine that makes breast cancer screenings more comfortable for women to technology that drastically reduces the amount of helium needed for an MRI.
“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 plans to fully separate its 62.5% interest in Baker Hughes over the next two to three years.
Earlier this week, GE announced its plans to sell its distributed power business to private equity firm Advent International for $3.25bn.
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