November 10, 2021
GE has announced its plan to divide itself into three public companies focused on aviation, healthcare, and energy. The company is pursuing a tax-free spin-off of GE Healthcare by early 2023 (with GE retaining a stake of 19.9%), and will combine its GE Renewable Energy, GE Power, and GE Digital divisions into one business, and then pursuing a tax-free spin-off of that entity in early 2024.
The remaining GE business will be focused on aviation. According to GE spokesperson Shaun Wootton, GE Additive will remain a division of the aviation business. Wootton also noted that there will be no anticipated impact on facilities or employees of the aviation business at this time. The GE Additive business has been a key player in developing end-use parts for aviation applications, including printed metal engine parts. The GE Renewable Energy division has also recently leveraged some 3D printing technology, but from other technology providers.
“At GE we have always taken immense pride in our purpose of building a world that works,” said GE Chairman and CEO H. Lawrence Culp, Jr. “The world demands—and deserves—we bring our best to solve the biggest challenges in flight, healthcare, and energy. By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees. We are putting our technology expertise, leadership, and global reach to work to better serve our customers.”
Culp continued, “Today is a defining moment for GE, and we are ready. Our teams have done exceptional work strengthening our financial position and operating performance, all while deepening our culture of continuous improvement and lean. And we’re not finished—we remain focused on continuing to reduce debt, improve our operational performance, and strategically deploy capital to drive sustainable, profitable growth. We have a responsibility to move with speed to shape the future of flight, deliver precision health, and lead the energy transition. The momentum we have built puts us in a position of strength to take this exciting next step in GE’s transformation and realize the full potential of each of our businesses.”
According to the company, GE is on track to reduce debt by more than $75 billion by the end of 2021 and bring its net-debt-to-EBITDA ratio to less than 2.5x in 2023.
Culp 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.