General Electric to break up into 3 companies to simplify business, pare debt

General Electric (GE) said on Tuesday it would split into three public companies as the storied US industrial conglomerate seeks to simplify its business, pare down debt and breathe life into a battered share price. The split marks the end of the 129-year-old conglomerate that was once the most valuable US corporation and a global symbol of American business power. GE shares were up 6% in morning trade, reaching an over 3-year high. The Boston-based company said the three businesses would focus on energy, healthcare and aviation. It will combine GE Renewable Energy, GE Power, and GE Digital and spin off the business in early 2024. GE will also separate the healthcare company, in which it expects to retain a stake of 19.9%, in early 2023. After the split, it will become an aviation company, helmed by GE CEO Larry Culp. It is the boldest attempt under Culp, who took GE’s reins in 2018, to simplify the company’s business. Culp has focused on reducing debt and improving cash flows by streamlining operations, cutting overhead costs and faster collections from customers. The measures have led to an improvement in GE’s balance sheet, putting it on track to reduce debt by more than $75 billion by the end of 2021. Culp did not expect the spin-off to face any regulatory or labour issues and that there was no investor pressure behind the spin-off decision.

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