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General Electric breaking up into three different companies


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GE plans to spinoff the health-care unit by early 2023 and the energy unit by early 2024, the company said in a press release.

 

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U.S. industrial giant General Electric will split into three companies following years of seeing its stock underperform, the company announced on Tuesday.

 

The company will be divided into separate units focused on aviation, health care and energy. GE plans to spin off the health-care unit by early 2023 and the energy unit by early 2024, the company said in a news release.

 

GE shares, which are already up 55% over the last 12 months,  jumped more than 4% in premarket trading.

 

“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,” CEO Lawrence Culp said in a statement accompanying the announcement. “We are putting our technology expertise, leadership, and global reach to work to better serve our customers.”

 

The name GE will live on with the aviation company after the move is complete, and Culp will continue to lead that unit, the company said.

 

General Electric was co-founded in the late 1800s by Thomas Edison and went through several transformations over the last century as the U.S. economy changed, becoming a leader in appliances, jet engines and power turbines.

 

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The company has been plagued by high levels of debt in recent years that have drawn skepticism on Wall Street. The capital structures of the new firms will be announced at a later date, GE said, and Culp added on a call with investors that the energy segment will have the least amount of debt.

 

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