GE plans to spin off its healthcare business, leading shares to rise
It has recently been reported that multinational conglomerate General Electric is set to spin off its healthcare business as it continues its restructure and focus predominately within renewable energy, power and aviation markets.
The company has sold off a number of its units, such as GE Appliances and Lighting and now its distributed power arm, which is being acquired by Advent. However, it has also taken on new ventures, such as the launch of GE Digital in 2015.
Nonetheless, the move to spin off its healthcare arm follows on from the growing trend of external companies venturing further into the industry or looking for potential ‘quick wins.’
The $19bn business provides medical imaging, monitoring, biomanufacturing, and cell and gene therapy technologies, as well as precision health in diagnostics (in partnership with Roche Diagnostics), therapeutics and monitoring through intelligent devices, data analytics, applications and services.
See also
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Through its ongoing strategic review, the company will aim to create a "a simpler, stronger, leading high-tech Industrial company” and reduce net debt by up to $25bn by 2020.
“GE will be a focused high-tech industrial company that will be easier for investors to follow and measure with a significantly improved balance sheet to support its remaining businesses,” the company has said.
Although shares plunged over 25% following on from the news that the company had fallen out of the Dow Jones Index in favour of Walgreens Boots Alliance, its shares rose slightly upon the news.
Additionally, the company is selling it 62.5% stake in Baker Hughes, following on from its move to invest in renewable energy initiatives.
