GE HealthCare officially entered the market as a separate company—spinning off from parent company General Electric (GE).
Key Details
- GE HealthCare’s spin-off is a part of GE’s plan to shift its main focus to aviation. GE HealthCare’s primary focus is on medical technology.
- “It’s (the spin-off) enabled us to kind of simplify how we run the company, and ultimately, it’s about capital allocation over the long run,” GE HealthCare CEO Peter Arduini says.
- GE will retain 19.9% ownership of GE HealthCare.
- The newly independent company is now trading at around $60 a share.
Why it’s news
GE isn’t alone in its decision to spin off a company division to take advantage of the growing medical technology industry.
Johnson & Johnson announced in September that its line of consumer products would now be part of a separate company called Kenvue. Medical device manufacturer Medtronic spun off a division of its products, including patient monitoring and respiratory devices, into individual businesses.
GE HealthCare’s spin-off is one of many planned in the near future. GE is planning to streamline all of its operations. Soon, the company will spin off its renewable energy, power, and digital divisions into another company called GE Vernova.
Backing up a bit
GE announced plans to divide into three distinct companies—GE Aerospace, GE HealthCare, and GE Vernova.
The three divisions of the 125-year-old company will focus on aviation, healthcare, and energy.
GE HealthCare has lofty aspirations for 2023. The company plans to complete 4 million product installations and 2 billion patient exams during its first year as an independent company.
GE plans to spin off GE Vernova in 2024. The company will look to provide access to affordable and sustainable energy options.
GE Aerospace will continue to provide engines for both commercial and military aircraft.