Is GE Breaking Up? Plans to Split Into Three Companies by 2024

General Electric, one of the most iconic businesses in the U.S., announced plans to split into three distinct and publicly traded companies. Currently, GE trades on the NYSE as “GE.” The company plans to shift its strategy by creating three companies in the areas of aviation, healthcare, and energy.

CEO Larry Culp said, “We are putting our technology expertise, leadership, and global reach to work to better serve our customers.” The division is the latest in a series of moves to shed debt and restructure GE’s business. The one-time expenses for the split are estimated at about $2 billion, according to a company press release.

Unlike a traditional stock split, in which a company increases its number of outstanding shares to make individual shares more affordable, GE is splitting into three unique companies. The company will conduct tax-free spin-offs of the healthcare and energy segments.

Moving away from a conglomerate structure, GE is shifting from being a “massive behemoth that dominated electricity, lighting, aviation, television, radio, music, appliances, finance and health care," reported CNN Business.

GE completed a reverse stock split on July 30. It was a 1-for-8 ratio of the company’s common stock, converting every eight shares of the company prior to the split into one share.

The company intends to keep GE as the aviation arm of the company. Culp intends to stay on as CEO and chairman of the new GE. The healthcare segment is expected to spin off in early 2023, while the renewable energy and power business will follow in 2024.

Culp said, “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’s press release about the split discussed the expectations that this move will help the company to reduce debt, strengthen liquidity, and improve cash management.

The move to spin off GE’s healthcare business has been a topic of discussion for the past several years. Now, with the news of the trio of companies, GE says it plans to complete the healthcare spin-off by early 2023.

Culp plans to remain on the executive board of GE's healthcare company as non-executive chairman. Peter Arduini will be the president and CEO of GE Healthcare as of January 1, 2022.

In its press release, GE stated that it plans to retain a 19.9 percent stake in the healthcare business when the spin-off is completed.

The aviation-centered portion of GE will be the only part of the business to retain the GE name following the splits. John Slattery will remain as the CEO of GE Aviation until the split, at which time Culp is expected to lead the aviation business.

GE’s energy segment will combine GE Renewable Energy, GE Power, and GE Digital into one company. The tax-free spin-off is planned for 2024. Scott Strazik will be the CEO of the newly combined energy business.