GE HealthCare mulls multibillion-dollar sale of China business line: Report
GE HealthCare is mulling a sale of its China business line amid trade tensions with the U.S., according to a report published Thursday.
The Chicago-based imaging giant has consulted with advisors about options to unload the division, with the potential to fetch several billion dollars, Bloomberg first reported, citing unnamed sources. GE HealthCare had estimated in April it could see revenue fall $500 million, because of tariffs.
In August it continued to face fiscal declines, with GEHC estimating its Q2 earnings margins decreased slightly (14.6% vs. 15.3%). In particular, the U.S. tariff rate levied on items imported from China was expected to be about 54%, while reciprocal tariffs from the Asian nation on U.S. goods were forecasted at 34%.
GE HealthCare declined to comment to Bloomberg, citing a policy not to address such rumors, but emphasized it remains committed to the Chinese market. The news outlet noted all talks are preliminary, and no deals have been finalized.
Amid political tensions, fierce competition and slowing economic growth in the republic, U.S. companies’ overall optimism about the five-year business outlook in China has fallen, Reuters reported. This figure fell to a record low of 41%, according to survey data from the American Chamber of Commerce in Shanghai.
GE HealthCare has a significant presence in China including facilities across Beijing, Wuxi, Tianjin, Shanghai, Chengdu, and Shenzhe. Its local manufacturing, research and development teams produce radiopharmaceuticals, AI-powered imaging devices and ultrasound systems.
“These technologies are tailored to meet China’s fast-evolving healthcare needs while impacting global healthcare practices,” the company said on its website. “GE HealthCare China operates as a strategic innovation hub, committed to delivering high-quality care with products made in China for the world.”
It employs 7,000 employees and logged China revenues totaling $2.13 billion last year, according to GEHC’s annual report, making this the third largest market for the manufacturer after America and Europe. The Chinese region saw a roughly 15% sales decline, with Philips and Siemens Healthineers also facing similar downturns, Fierce Biotech noted.
GE HealthCare logged total worldwide revenues for the 12 months ending June 30 of approximately $20 billion.
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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.