General Electric (GE) announced plans on Tuesday to split into three separate companies.
Gatekeepers News reports that GE will become separate, publicly traded companies for its aviation, healthcare and energy businesses.
The industrial conglomerate, founded by Thomas Edison in 1892, said it hopes to spin off the healthcare business to shareholders in early 2023 and that the separation of its renewable energy and power business will occur in early 2024.
Shares of GE (GE) surged as much as 17 percent in premarket trading on the news before retreating to about a 6 percent gain in early trading after the open. The stock was already up more than 25 percent in 2021 before the spin-off announcement.
CEO Larry Culp, in a press release, 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.
“We are putting our technology expertise, leadership, and global reach to work to better serve our customers.”
It was gathered that the company expects one-time costs associated with the split, including separation pay, of about $2 billion. After the spinoffs, the aviation-focused company will keep the GE name.
Culp is expected to remain as CEO and chairman of that company, although he will also serve as non-executive chairman of the healthcare company. The new, smaller GE will retain a 19.9% stake in that company.
