General Electric announced plans Tuesday to split itself into three separate companies in the aviation, healthcare and energy sectors.
The company hopes to spin off its healthcare division by 2023 and its energy division by 2024, General Electric (GE) announced in a press release Tuesday. GE said the move would better position the now-independently run companies to “deliver long-term growth” and serve investors and customers.
“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,” GE chief executive H. Lawrence Culp, Jr. said in the press release. “We are putting our technology expertise, leadership, and global reach to work to better serve our customers.”
GE said that as independently run companies with boards of directors dedicated to each company’s specific sector, the three businesses would be more agile and better able to meet customer needs. The company also said that its strong performance during the COVID-19 pandemic gave it the momentum it needed to pull off the move.
“We have a responsibility to move with speed to shape the future of flight, deliver precision health, and lead the energy transition,” Culp said. “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.”
The company estimates spinning off the companies to cost less than $2.5 billion.
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