GE to form three public companies focused on aviation, healthcare and energy

November 12, 2021

GE has announced its plan to form three independently run global public companies, focused on the growth sectors of aviation, healthcare, and energy. The company intends to establish a tax-free spin-off of GE Healthcare, creating a pure-play company at the center of precision health in early 2023. It will combine GE Renewable Energy, GE Power and GE Digital into one business, creating a tax-free spin-off in 2024. Following these transactions, GE will become an aviation-focused company.

“At GE, we have always taken immense pride in our purpose of building a world that works. The world demands – and deserves – we bring our best to solve the biggest challenges in flight, healthcare, and energy,” stated H Lawrence Culp, Jr, GE chairman and CEO. “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.”

“Today is a defining moment for GE, and we are ready. Our teams have done exceptional work strengthening our financial position and operating performance, all while deepening our culture of continuous improvement and lean. And we’re not finished – we remain focused on continuing to reduce debt, improve our operational performance, and strategically deploy capital to drive sustainable, profitable growth,” Culp continued. “The momentum we have built puts us in a position of strength to take this exciting next step in GE’s transformation and realise the full potential of each of our businesses.”

In the current portfolio of businesses, GE is reportedly on track to reduce debt by more than $75 billion by the end of 2021 and is now on track to bring its net-debt-to-EBITDA ratio to less than 2.5x in 2023. GE will continue to drive operating improvements for sustainable profitable growth, and the company now expects to achieve high-single-digit free cash flow margins in 2023.

Culp will serve as non-executive chairman of the GE healthcare company upon its spin-off. He will continue to serve as chairman and CEO of GE until the second spin-off, at which point he will lead the GE aviation-focused company going forward.

Peter Arduini will assume the role of president and CEO of GE Healthcare effective January 1, 2022. Scott Strazik will be the CEO of the combined Renewable Energy, Power, and Digital business, while John Slattery will continue as CEO of Aviation.

The transactions are subject to the satisfaction of customary conditions, including final approvals by GE’s Board of Directors, private letter rulings from the Internal Revenue Service and/or tax opinions from counsel, the filing and effectiveness of Form 10 registration statements with the US Securities and Exchange Commission, and satisfactory completion of financing.

www.ge.com

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