General Electric rises up to 5% after announcing its future spin-off in 3 listed companies

The US industrial conglomerate General Electric (GE) confirmed on Tuesday its plan to split into three different companies. In this way, the company will divide its operations into three listed entities focused on aviation, health care and the energy sector. A transformation that will begin in just over a year.

According to the details offered by the company, the partition will begin in 2023 by GE Healthcare, the health area, and will be tax-free. The new entity will become an independently publicly traded company, in which GE expects to hold a 19.9% ​​stake.

In search of courage

At the same time, the conglomerate intends to combine GE Renewable Energy, GE Power and GE Digital into a single business, positioned to lead the energy transition. Once this merger is completed, the new entity will depart from the parent company and a stock market premiere is projected that could arrive in early 2024. This evolution will also be free of tax burdens.

Ultimately, GE will become a company whose main business will be centered on GE Aviation, which basically focuses on the airline industry and the future of aviation.

The logic behind this metamorphosis is that independent management of this trio of companies will position their respective businesses to deliver greater long-term growth as well as ensure greater value creation for GE investors, customers and employees.

The shares of the conglomerate received with increases of more than 5%, in the middle of the European session, this new roadmap. In the last 12 months they accumulate a return of 55%.

Under its current CEO and President Lawrence Culp, GE has undergone a profound transformation. In early 2019, GE announced the sale of its biopharmaceutical division to Danaher for about $ 21 billion. You recently completed the sale of your aircraft rental unit to AerCap.