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Strategic restructuring is designed to position GE Healthcare as a pure-play healthcare company.
GE has announced plans to separate GE Healthcare into a standalone company as part of a strategic restructuring that will refocus the company on aviation, power, and renewable energy businesses.
The company will maintain the GE brand, and Kieran Murphy, president and CEO of GE Healthcare, will continue to the lead the company. The company “will conduct business as usual throughout this process,” according to a June 26, 2018 statement announcing the restructuring.
GE Healthcare recorded more than $19 billion in revenues, 5% revenue growth, and 9% segment profit growth in 2017, according to the statement. The Life Sciences unit of GE Healthcare provides biomanufacturing, cell therapy, and laboratory technologies. The Healthcare group also offers medical imaging, monitoring technologies, contrast media and nuclear tracers, and digital solutions.
The company reported that it expects to monetize 20% of GE Healthcare stock and distribute remaining 80% of stock to shareholders; transactions are expected to be completed in 12–18 months. The company also announced plans to divest of a 62.5% stake in Baker Hughes, a GE company (BHGE), an oil and gas servicing and equipment provider.
“Today marks an important milestone in GE’s history,” said John Flannery, chairman and CEO of GE, in the statement. “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.”
“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,” Flannery said in the statement.
“GE Healthcare’s vision is to drive more individualized, precise, and effective patient outcomes. 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. We will build on strong customer demand for integrated precision health solutions and great technology with digital and analytics capabilities as we enter our next chapter,” said Murphy in the statement.