GE will be divided into three separate companies focusing on aviation, health care and energy
Industrial giant General Electric will split into three companies following years of stocks failure, the company announced on Tuesday.
The company will be divided into separate units focusing on aviation, health care and energy. GE plans to phase out the healthcare sector by 2023 and the energy unit by 2024, the company said in a news release.
GE shares, already up 55 percent in the last 12 months, exceeded 12 percent in market trading.
The conglomerate grew rapidly in the 1980s under the late Jack Welch, entered financial services and returned to broadcasting with the purchase of NBC.
“By building the three leading companies in the industry, public enterprises around the world, each can benefit from greater focus, consistent funding, and strategic flexibility that promotes sustainable growth and long-term value for customers, investors and employees,” CEO Lawrence Culp said in a statement. accompanying the proclamation. “We put our expertise, leadership, and global reach to work to better serve our customers.”
The name GE will continue to operate at the airline after the move is completed, and Culp will continue to lead the airline, the company said.
General Electric was founded in the late 1800s by Thomas Edison and went through several revolutions during the last century as the U.S. economy. transforms, becoming a leader in electronics, jet engines and electric motors.
The conglomerate grew rapidly in the 1980s under the late Jack Welch, went into financial services and returned to broadcasting with the purchase of NBC, the envy of growing sports revenue and the return of investors along the way.
GE spent time as a large company with market value recently in the early 2000s, but then there was a financial crisis. Weighed down by its troubled financial arm, GE was unable to climb to the top under Welch successor Jeff Immelt. The stock was discarded at the Dow Jones Industrial Average in 2018 after it became one of the first members of the blue chip index, going back to 1896.
Despite recent inefficiencies, GE shares have undermined the market over the past two decades. Stocks have lost 2 percent a year since 2009, compared with a 9 percent annual return of the S&P 500, according to FactSet.
The company has been hit by high debt in recent years which has created doubts on Wall Street. Major buildings for new firms will be announced later, GE said. The company said it would use the recently sold funds of its aviation support agency to pay off the debt.
