GE’s plan to split in 3 sets stage for ‘feeding frenzy’ among private equity buyers
General Electric’s recently announced plans to split into three separate companies sets the stage for a “feeding frenzy” among private equity, the Financial Times reported Monday.
GE first announced the move on Nov. 9, with the struggling industrial giant separating into firms focused on healthcare, aviation and energy. The healthcare spinoff is expected to occur in early 2023, while its renewable energy and power business line would follow in 2024.
Potential buyers are now lasering in on GE’s assets, hoping to carve the conglomerate into even smaller pieces.
“We are sharpening the pencils,” an executive at a large, global alternative asset manager told the Financial Times. “I think everything else other than healthcare may be able to sell for a better price in the private marketplace than when it goes public.”
GE’s health division, maker of MRI machines and ultrasound scanners among other things, currently generates $17 billion in annual sales. Meanwhile, the renewable energy and power group does everything from making gas turbines to managing nuclear facilities. Investors are particularly interested in GE’s avionics business, which makes aircraft navigation systems, the report noted. One private equity partner called last week’s announcement the “death knell” of the conglomerate business strategy.
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Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.