General Electric plans to spin off its health care business and sell its stake in Baker Hughes, a company that provides services to the oil industry, as CEO John Flannery refocuses the company on its aviation, power and renewable energy units.
The company's latest round of winnowing arrived Tuesday, the first time since 1907 that GE will not be a member of the exclusive Dow Jones Industrial Average at the opening bell. GE had been the only remaining original member of the Dow -- it joined in 1896 but was booted twice in its early years -- and will be replaced by the Walgreens Boots Alliance.
GE will sell approximately 20 percent of the health care business straight away and distribute the rest to its shareholders over the next 12 to 18 months as sheds those assets. It will take two to three years to sell its two-thirds stake in Baker Hughes, valued at around $23 billion. Refocusing the conglomerate will make GE "simpler and stronger," Flannery said in a statement.
"Today marks an important milestone in GE's history," Flannery said. "We are aggressively driving forward as an aviation, power and renewable energy company—three highly complementary businesses poised for future growth."
Flannery was given a mission last year to reshape the company, and his overhaul has grown more radical in recent months. The company has shrunk dramatically since it became entangled in the financial crisis a decade ago and Flannery has vowed to shed $20 billion in assets quickly.
The company said in a statement that it's reducing its debt by $25 billion.
GE shares closed at $12.75 on Monday, down from their high of $60 a share in August 2000.
The stock-price slide is a key factor in GE's exit from the Dow, which is calculated using the prices of 30 large, or "blue chip" stocks from various U.S. industries.
The low price of GE shares means the company has a weight in the index of less than one-half of one percentage point, S&P Dow Jones Indices said.
The report of a further business spin-off helped them edge up in premarket trading, with a gain of 1.8 percent to $12.98.
© 2018 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Read again GE to spin off health care business in latest shake-up : https://ift.tt/2yLJ62O
Bagikan Berita Ini
0 Response to "GE to spin off health care business in latest shake-up"
Post a Comment