USA – GE will spin off its healthcare division, GE Healthcare, in early 2023 as part of a larger effort to separate the nearly 130-year-old industrial giant into three separate public companies.
Though, new branding capitalizes the “C” in “healthcare” (i.e. GE HealthCare) — a move the company says better demonstrates the healthcare business’s focus on supporting both better health and better care and the interdependency of the two.
The new logo also uses a softer font and substitutes the classic GE blue with a soft purple that is meant to evoke compassion.
Once it’s spun off, GE plans to retain a stake of 19.9 percent in GE Healthcare. The conglomerate will also combine its renewable energy, power and digital businesses and spin them off in early 2024, leaving the original company to focus on aviation.
The company expects the separation and transition to cost around US$2 billion, with tax costs at less than US$0.5 billion. GE intends the healthcare and energy spinoffs to be tax-free.
“Today and tomorrow, delivering on the future of healthcare is about enabling precision health: integrated, efficient and highly personalized care,” GE chairman and CEO Larry Culp said on a call with investors.
Culp will serve as nonexecutive chairman of the healthcare company once it’s spun off, while Peter Arduini will take on the president and CEO role of GE Healthcare starting in 2022.
GE is pitching the separation as a way to allow the companies to focus on their specific business areas and make decisions in line with their respective industries.
Significance of spin-off
GE is pitching the separation as a way to allow the companies to focus on their specific business areas and make decisions in line with their respective industries.
GE said the separate companies will also allow for dedicated boards with expertise in their areas, and for industry-specific career opportunities and incentives for employees.
The move enables “each of the three companies to move forward and leverage the heritage that the brand represents, but also as a springboard for its own independent future success,” Culp said.
“Coupled with the extensive installed bases that we have in each of the businesses, I think keeping the brand name really provides us with important brand continuity as we move forward.”
The company said it plans to execute its tax-free healthcare spinoff in early 2023 if all goes well, after which GE HealthCare—currently an US$18 billion division, with over 4 million devices in use worldwide and ties to more than 2 billion patient exams per year—will be traded on the Nasdaq under the ticker symbol “GEHC.”
It will be led by Peter Arduini, who took on the role of CEO and president of the healthcare division at the start this year.
GE’s existing energy portfolio of businesses will sit together under the brand name GE Vernova win it spins off in early 2024.
GE Aerospace will be the name of GE’s aviation business —which will also officially hold on to the GE trademark and license it to the other outfits.
GE had planned to break off its healthcare unit before; in June 2018, it announced it would separate the division over the next two to three years, but in 2019 Culp said it was re-evaluating those plans after the sale of its biopharma business.
GE Healthcare previously slimmed down its operations in early 2020 with the sale of its biopharma business to Danaher—a US$21.4 billion trade that resulted in Cytiva, provider of biomanufacturing hardware for drug and diagnostics development as well as cell and gene therapy production.
In late September, GE Healthcare announced it had entered into an agreement to acquire surgical visualization company BK Medical for US$1.45 billion in cash, which GE argued would support the expansion of its ultrasound business.
Earlier this year, it also announced the acquisition of Zionexa, a developer of in-vivo biomarkers to guide cancer treatment. In late 2020, GE Healthcare purchased Swedish medical X-ray imaging startup Prismatic Sensors.
In March, the healthcare division revealed the Vscan Air, a wireless, portable ultrasound device.
Other major medtech businesses have also sought to rebrand amid these rapidly changing times. For example, Johnson & Johnson Medical Devices rebranded as Johnson & Johnson MedTech earlier this year to signal its movement into digital technology.
Rebranding doesn’t always go smoothly. Siemens found itself panned over its decision to rebrand its healthcare business as Siemens Healthineers in 2016. Spun off as a stand-alone business in 2018, it has held onto the Siemens Healthineers name.
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