GE to spin off healthcare business, divest oil services

Share
GE to spin off healthcare business, divest oil services

GE, an icon of American industry, has struggled to rebound from the financial crisis of 2008-2009.

"Today's actions unlock both a pure-play healthcare company and a tier-one oil and gas servicing and equipment player".

The announcement comes on the first day in 110 years that GE will not be in the Dow Jones Industrial Average.

The company said the moves will lower its debt by $25 billion and reduce risk.

Indeed, GE's move could prove beneficial by freeing the healthcare division from the constraints of a corporate parent and giving it more independence - a rationale cited by Siemens for its spinoff of Siemens Healthineers into a separate company.

The proposed sale was though not entirely unexpected after Flannery disclosed earlier this year GE was considering "exit options" for Baker Hughes as part of a planned $20 billion divestment effort in a reversal of its formerly expansionist stance.

"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", he said in a statement. The CEO already reduced the payout in November, a painful blow to the many investors who have come to rely on the steady income.

Flannery has said he wants to see margins improve at GE-RE. CEO, joined the board earlier this year. Investors have been bracing for a possible cut as GE's condition has deteriorated.

Despite Flannery having insisted that "everything [was] on the table" when evaluating a potential breakup of GE, there have been few signs the company was seriously considering letting go of its renewables business, which offers one of the broadest portfolios of clean-energy technologies in the market.

Since then, Flannery has agreed to unload GE's century-old locomotive operations.

Early this year, after GE detailed worse-than-expected problems with insurance liabilities, Flannery promised to explore bigger changes, including a possible breakup.

GE will sell approximately 20 percent of the health care business straight away and distribute the rest to its shareholders over the next 12 to 18 months as sheds those assets.

In April, medical equipment maker Danaher Corp approached GE about potentially acquiring the life sciences division of its healthcare unit, a major source of sales that makes X-ray machines and hospital equipment, according to a person familiar with the matter.

"We are a leading player in onshore wind, gaining market share in 2017", he says.

The U.S. and European manufacturing titans have historically tracked each other's business closely, with close competition in power turbines, household appliances, medical devices and light bulbs. GE's aviation business has soared on strong demand for jet engines, but its power unit has suffered declining profit, and GE now plans to pump another $3 billion into its GE Capital finance business next year.

As of late, the organization has been busy selling various assets.

GE pledged to preserve its 48-cent-a-year dividend until the healthcare unit is spun off, partially appeasing investors who have expressed concerns about GE's ability to pay it. "One business had no idea what another business did", he bemoaned.

Share

Advertisement

Related Posts

Sweden's Janne Andersson: Only 'emotionally dead' could have resisted Germany provocation
Each would have three points in games played against each other and an even goal differential against each other. Speaking in his post-match press conference, Low revealed how his team managed to secure all the three points.

Iceland crash out after Croatia loss
The Iceland defender Sverrir Ingason almost scored twice just moments later, heading just over and then again off the crossbar. Croatia ended Iceland's chances at the World Cup and helped out Argentina at the same time .

Liberman adds fuel to Iran protests slamming Tehran's support for terror groups
China, which remained in the Iran deal after the US withdrawal, was the largest importer of Iranian oil in 2017. Widespread protests also erupted at the end of previous year across Iran over the ongoing economic situation.

The $159 Nokia 3.1 Is Headed to the U.S. on July 2
The Nokia X6 is priced very aggressively in China, the base variant with 4GB RAM costs just 1299 Yuan. Now, a new smartphone called Nokia 6 .1 Plus is listed on Google's ARCore website.

US judge orders separated families must be reunited within 30 days
Several House conservatives left a closed-door meeting of Republicans early on Tuesday expressing discontent with the broad bill. After retreating on the family separations, Trump urged Congress to act quickly and follow up his order with legislation.

Oil prices: Trump did not pressure us to increase production - Barkindo
Oil markets are feeling the pressure as Libyan output concerns are jamming up against OPEC production hikes. We believe that the investors have over-reacted to the move, which has resulted in a rise in oil prices.

Blood Moon 2018: Longest Total Lunar Eclipse of Century Occurs July 27
The eclipse will be visible to people living in the Eastern Hemisphere, meaning Europe, Africa, Asia, Australia and New Zealand. Interestingly, this blood moon could occur around the time when Mars will be closest to the Earth in the last 15 years.

‘Cardboard’ Switch Announced as Nintendo Labo Contest Prize
Given our habit of "leaning in" to turns, this feature will likely be a welcome addition for Labo owners. Specifically, you can now ride the Toy-Con, the RC vehicle from the Labo Variety Pack, in the game.

Late Night Hosts Join Forces to Respond to Trump
Add Donald Trump as an interest to stay up to date on the latest Donald Trump news, video, and analysis from ABC News. "Hm. ET on CBS, and The Tonight Show Starring Jimmy Fallon airs weeknights at 11:35 p.m.

Stephen Colbert and Jimmy Fallon team up after Trump's 'no talent' comments
Henry McMaster ahead of Tuesday's primary, Trump commented on the deluge of criticism coming from late night hosts. "Listen, Mr. Fallon says he heard Trump said they are "all no-talent, lowlifes, lost souls". "I'm busy having no talent", Colbert said.

© 2015 ExpressNewsline. All Rights reserved.