GE has announced this afternoon that it will sell off its 62.5% stake in BHGE and GE Healthcare, putting them outside the business.
It will spin off its medical-equipment business and sell its majority stake in oilfield supplier Baker Hughes, who GE acquired in 2017.
The future company will narrow its focus to power, renewable energy and jet engines, GE said in a statement Tuesday.
The changes will profoundly reshape an icon of American business, which is mired in one of the worst slumps in its 126-year history amid flagging demand for industrial equipment, weak cash generation and an accounting investigation by U.S. regulators.
A spokesman for BHGE said: “BHGE is a strong and differentiated company positioned for growth. GE’s announcement today to fully separate BHGE over the next 2-3 years provides a defined path for us, and is one we are prepared for.
“We continue to stay focused on what matters most: supporting our team, delivering for our customers and driving long-term value for our shareholders.”
John Flannery, chairman and CEO of GE, said: “Today marks an important milestone in GE’s history. We are aggressively driving forward as an aviation, power and renewable energy company—three highly complementary businesses poised for future growth.
“We will continue to improve our operations and balance sheet as we make GE simpler and stronger.”
Flannery continued, “GE Healthcare and BHGE are excellent examples of GE at its best—anticipating customer needs, breaking barriers through innovation and delivering life-changing products and services. Today’s actions unlock both a pure-play healthcare company and a tier-one oil and gas servicing and equipment player.
“We are confident that positioning GE Healthcare and BHGE outside of GE’s current structure is best not only for GE and its owners, but also for these businesses, which will strengthen their market-leading positions and enhance their ability to invest for the future, while carrying the spirit of GE forward.”
“We are making fundamental changes to position our businesses for the future and redefine GE for another century for success,” Flannery said on a conference call with investors and analysts. “This is a GE that’s equipped to fight for the future.”