Boston, MA 6/26/18—GE has announced plans to spin off its $19 billion Healthcare business, which includes the company’s medical imaging, biomanufacturing and cell therapy franchises, in order to focus on its Aviation, Power and Renewable Energy businesses. GE will also separate its Baker Hughes business. “GE Healthcare’s vision is to drive more individualized, precise and effective patient outcomes. As an independent global healthcare business, we will have greater flexibility to pursue future growth opportunities, react quickly to changes in the industry and invest in innovation,” stated GE Healthcare President and CEO Kieran Murphy, who will continue to head GE Heathcare. “We will build on strong customer demand for integrated precision health solutions and great technology with digital and analytics capabilities as we enter our next chapter,” GE Chairman and CEO John Flannery stated, “Today’s actions unlock both a pure-play healthcare company and tier-one oil and gas servicing and equipment players.” The separation of the GE Healthcare is expected to result in cash equal to 20% of GE’s interest and the distribution of the remaining 80% of cash to GE shareholders tax free. GE also named former Danaher CEO Larry Culp as lead director, succeeding Jack Brennan. The change comes as GE responds to declining profitability, high debt and a falling stock price, and is part of the company’s general overhaul that also includes the divestiture of three other businesses. As a separate business, GE Healthcare is expected to benefit from its scale and and leading positions in markets such as bioprocessing and contrast agents, according to Mr. Murphy. Last year, GE Healthcare accounted for 16% of GE’s revenues. It consists of four businesses: Diagnostic Imaging & Service, Mobile Diagnostics & Monitoring, IT & Digital Solutions and Life Sciences. In 2017, the Life Sciences division, which encompasses the company’s bioprocess, protein and cell science, contrast media and nuclear tracers, and cell therapy business, generated $5 billion in revenues. In spring 2017, the company reported an expected compound annual growth rate from 2016 to 2018 of 5% for the Life Sciences business, including 9% growth for Bioprocess.  In 2016, Life Sciences reported margins above 20% and free cash flow of more than $1 billion. The spin off could provide the Life Sciences business, whose products include instrumentation and consumables for the analysis of genes, proteins and cells, with a higher profile, and the bioprocess business, whose products include LC, with additional resources to focus on acquisitions in a highly competitive market.    The separation is expected to complete in 12–18 months, with $18 billion of debt and pension obligations transferred to the Healthcare business. As Mr. Murphy told investors on a conference call, “We have a unique position in the industry. We are the only company positioned to work at the center of an ecosystem delivering on the promise of precision health,” referring to diagnosis, therapy and patient monitoring.

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