General Electric Corp. will split its organization into three separate businesses, with its mainstay manufacturing entity GE Aviation retaining the historic brand name. GE Healthcare will be established as a public company, starting in 2023, and a combination of GE Renewable Energy, GE Power, and GE Digital businesses will be the third entity, to be created in 2024.
GE became a diversified portfolio of businesses over the past 30 years, but it has sold off large segments over the past five years, including GE Appliances and GE Lighting. Earlier this year, General Electric earned $30 billion by pooling the GECAS aircraft leasing business with AerCap Holdings.
According to GE, the three independently run companies it plans to establish “will be better positioned to deliver long-term growth and create value for customers, investors, and employees.” As businesses, they will have more operational focus and accountability, with “capital allocation decisions in line with distinct strategies and industry-specific dynamics.”
GE chairman and CEO H. Lawrence Culp Jr. will serve as non-executive chairman of the GE healthcare company after its spin-off. He will continue to serve as chairman and CEO of GE until the second spin-off, and then he will lead the aviation-focused GE from 2024 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, and John Slattery will continue as CEO of GE Aviation.
The three companies’ respective capital structures, brands, and leadership teams will be determined and announced later. GE committed to consult with employee representatives, where required to do so, in line with its legal obligations before.
“The world demands—and deserves—we bring our best to solve the biggest challenges in flight, healthcare, and energy,” according to Culp. “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.”