GE to spin off its healthcare unit and divest Baker Hughes’ interests
Date: 2018-06-28   Author: Pankaj Singh  Category: #market

GE to spin off its healthcare unit and divest Baker Hughes’ interests

General Electric on Tuesday announced that it will spin off its healthcare business unit and let go of its stake in Baker Hughes, its publicly traded oil-services company. GE will reportedly be focusing on power plants, jet engines, and renewable energy industry.

For the record, Baker Hughes was bought by GE in 2017 and was combined with the company’s own operations oil & gas equipment services. The combination led to the generation of a new company in which GE holds a 62.5% stake. The unit was worth $17.23 billion in 2017. Reportedly, by giving up its entire share in the company, GE will apparently be exiting the oil sector.

The company confirmed plans to spin off its healthcare unit over a period of 12 to 18 months while it will gradually exit Baker Hughes over the next two to three years. Sources familiar with the matter stated that the moves are aimed to reinforce GE’s balance sheets and have resulted from a year-long strategic analysis.

GE expects to recompense the affected shareholders of the company by reducing debt, accumulating cash, and shrinking GE Capital further. The shareholders will receive a tax-free distribution of up to 80% of GE Healthcare’s value, the company further informed.

According to market trends, GE is facing tough competition in the healthcare sector from rivals like Siemens, Philips, and emerging Asian players for medical imaging machines, including MRI and ultrasound scanners. Reports suggest that the move to spin off its healthcare unit mirrors a similar action taken by Siemens, which separated its medical business as a standalone company in March, called Siemens Healthineers.

GE has set a target to reduce its net industrial debt by approximately $25 billion by 2020, while maintaining over $15 billion of cash on the balance sheet. Other decisions taken in line with the company’s strategy include selling its distributed power unit to Advent, which GE agreed to trade for $3.25 billion on Monday. Further plans indicate that GE will also divest its transportation unit which makes railroad locomotives.



About Author


Pankaj Singh

Pankaj Singh

Pankaj Singh Develops content for Algosonline, Market Size Forecasters, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

Read More

More from Pankaj


Post Recommendents

Xeljanz (tofacitnib) Drug Market Size - Industry Insights, Top Trends, Drivers, Growth and Forecast to 2025
Author: Partha Ray

Market Study Report, LLC, has added a research study on ' Xeljanz (tofacitnib) Drug market' which extends an in-depth analysis of the potential factors fueling the revenue landscape of this industry. The study also comprises valuable insights abou...


Angiotensin Receptor Blockers (ARBs) Market Size, Development, Key Opportunity, Application and Forecast to 2025
Author: Partha Ray

MarketStudyReport.com presents latest report on global Angiotensin Receptor Blockers (ARBs) Market, which evaluates the growth trends of the industry through historical study and estimates future prospects based on comprehensive research. The repo...


MEMS for Monitoring Market Size, Growth, Analysis, Outlook by 2019 - Trends, Opportunities and Forecast to 2025
Author: Partha Ray

A concise report on ' MEMS for Monitoring market' Added by Market Study Report, LLC, features latest statistics and facts about market size, profit estimation and geographical spectrum of this industry. Furthermore, the report elucidates major cha...