GE (NYSE:GE) announced plans today to split apart into three separate companies in coming years, including a stand-alone GE Healthcare.
GE Healthcare brought in $17 billion in sales in 2020 and remains one of the 10 largest medtech businesses in the world, even after GE divested its Biopharma business to Danaher in early 2020.
Boston-based GE will execute tax-free spinoffs of Healthcare in early 2023 and a Renewable Energy and Power company in early 2024. The remaining GE will become an aviation-focused company following the transactions.
“By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees,” GE CEO H. Lawrence Culp Jr. said in a news release.
Peter Arduini is in the process of leaving the top spot at Integra Lifesciences and will become president and CEO of GE Healthcare effective Jan. 1, 2022.
Culp will become the healthcare company’s non-executive chair upon its spinoff; he’ll lead the GE aviation-focused company once the two spinoffs are complete.
GE plans later announcements involving the respective capital structures, brands, and leadership teams for each independent company.
Upon closing the Healthcare transaction, GE expects to retain a 19.9% stake in the healthcare company to enable capital allocation flexibility. GE also expects that Healthcare will issue debt securities, the proceeds of which will be used to pay down outstanding GE debt.