General Electric Co. (GE) announced its plan to form three global publicly traded companies focused on the sectors of aviation, healthcare, and energy.
GE will pursue a tax-free spin-off of GE Healthcare, creating a pure-play company at the center of precision health in early 2023, in which GE expects to retain a stake of 19.9%.
GE Chairman and CEO H. Lawrence Culp, Jr. will serve as non-executive chairman of the GE healthcare company upon its spin-off. He will continue to serve as chairman and CEO of GE until the second spin-off, at which point, he will lead the GE aviation-focused company going forward.
Peter Arduini will assume the role of president and CEO of GE Healthcare effective January 1, 2022. Scott Strazik will be the CEO of the combined Renewable Energy, Power, and Digital business while John Slattery continues as CEO of Aviation.
The company will also combine GE Renewable Energy, GE Power, and GE Digital into one business and then pursue a tax-free spin-off of this business in early 2024. Following those transactions, GE will be an aviation-focused company.
The respective capital structures, brands, and leadership teams for each independent company will be determined and announced later.
The company and its businesses will continue to serve GE’s partners and customers throughout this transition.
Following the spin-off transactions, GE will retain other assets and liabilities of GE today, including run-off insurance operations. GE also intends that Healthcare will issue debt securities, the proceeds of which will be used to pay down outstanding GE debt.
The M&A market for healthcare companies continues to strengthen in 2021 and ahead of the projected increases in US capital gains taxes. There is unprecedented capital in market, the lowest interest rates in US history and strong acquirer motivations for high quality healthcare companies. Across the continuum of care, buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
Do you know the current market value of your business? We do! We are here to help you plan, prepare, explore and succeed in executing your strategic options.
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