KENYA – US industrial giant General Electric has announced it will be splitting into three public companies, as the storied US industrial conglomerate seeks to simplify its business, pare down debt and breathe life into a share price battered over several years.
The split marks the end of the 129-year-old conglomerate that was once the most valuable US corporation and a global symbol of American business power. The ambitious move drove an 8.2 percent rise in GE shares in premarket trading.
GE has faced investor skepticism about its ability to turn a corner since the 2008 financial crisis, while struggling with rising debt. It was also removed from the Dow Jones Industrial Average in 2018 following years of sliding valuation.
GE’s revenue for 2020 was US$79.62 billion, a far cry from the over US$180 billion in revenue it booked in 2008, as it spun-off or sold several of its businesses in an effort to streamline its bewildering structure.
The Boston-based company said the three divisions would focus on energy, healthcare and aviation. It will combine GE Renewable Energy, GE Power, and GE Digital and spin off the business in early 2024.
GE will also separate the healthcare company, in which it expects to retain a stake of 19.9 percent, in early 2023.
GE has been operational in Kenya since 2005. In 2011, GE Africa opened its Sub-Saharan Headquarters in Nairobi. The headquarters is now home to over 150 employees.
The company is committed to supporting Kenya in realizing its Vision 2030 and the Government’s Big Four Agenda on manufacturing, universal healthcare, affordable housing and food security.
In 2012, GE signed a landmark Memorandum of Understanding agreement with the government to develop projects in key sectors, including power and healthcare.
In June 2016, GE launched a US$13 million Healthcare Training Institute in Nairobi to support the Healthcare modernization program. Over 1,000 Kenyan healthcare professionals have been trained at the centre so far.
The company has also made remarkable strides towards improving healthcare across the continent. Three weeks ago, GE Healthcare and medical group AFRIPHARMA announced the opening of the Afri-Egypt Health Services Center, a first of its kind in Uganda with lifesaving equipment from GE Healthcare.
The Center is located in Jinja and is expected to serve to over 60,000 people from the region, allowing for improved accessibility in the surrounding communities.
In an interview, Chief Executive Officer Larry Culp said he did not expect the spin-off to face any regulatory or labor issue and that there was no investor pressure behind the spin-off decision.
“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,” Culp said in a statement.
Scott Strazik will head the combined Renewable Energy, Power and Digital business and Peter Arduini will lead GE Healthcare, the company said in a statement.
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