General Electric revealed that it will split into three individual companies, breaking up a U.S. industrial giant that has struggled over the past several years.
The company will divide into public entities focused on healthcare, aviation and energy. GE said it plans to spin-off its healthcare firm in early 2023 and renewable energy and power organization the following year, according to an announcement shared Tuesday.
“Today is a defining moment for GE, and we are ready,” chairman and CEO Lawrence Culp said in the statement. “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,” he added.
The firm has struggled to do just that even before Culp took over the company three years ago.
Culp will serve as chairman and CEO of GE until its energy company becomes independent. From that point, he will take over and lead the GE aviation organization going forward. Peter Arduini will take over as president and CEO of GE Healthcare effective January 1, 2022. Scott Strazik will serve as CEO of the energy business and John Slattery will continue as CEO of aviation.
“At GE we have always taken immense pride in our purpose of building a world that works,” Culp said Tuesday. “The world demands—and deserves—we bring our best to solve the biggest challenges in flight, healthcare, and energy.”
After the transactions close, GE said it plans to retain a 19.9% stake in the healthcare company to maintain capital allocation flexibility.
The proposed spinoffs are still subject to approval by GE’s board of directors and the U.S. Securities and Exchange Commission, among others.