General Electric to split into three companies

General Electric to split into three companies

General Electric, the US industrial giant, announced that the company intends to split into three separate units focusing on aviation, health care, and energy.

The company’s stock has not shown significant growth for the last several years despite no crises being cracked down on it. General Electric has been a market leader by market cap in the industrial sector since the beginning of the 21st century. However, after facing a crisis, it could not climb back to the top of the ranks. In 2018, the company’s stock dropped out from the industrial Dow Jones index, where GE has been positioned among the leading companies since 1896. The GE governance decided to separate the company into three firms working independently in their production sector. This measure is aimed at recovering the company after seeing its stock underperforming.

“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,” General Electric CEO Lawrence Culp said.

The market expressed mixed reactions after the news release. Wall Street experts raised concerns about the plans amid the company plagued by substantial debts. According to General Electric management, the capital structures of the new firms will be announced later. The company said it will “use proceeds from the recent sale of its aviation financing unit to pay down debt.”


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