GE continues slim down with $21bn sale of BioPharma business
Last year, General Electric (GE) decided to separate GE Healthcare from the core part of its business, to concentrate on its focus areas of aviation, power and renewable energy.
According to CNBC, GE began to ready paperwork for the IPO of its health care business to complete its spinoff, but these plans will likely be shelved after it agreed a $21.4bn (€18.85bn) with Danaher for the BioPharma unit within GE Healthcare.
Danaher is expected to pay the bulk of the sum, $21bn, in cash, with the deal expected to close in the fourth quarter of 2019.
GE CEO Lawrence Culp, Jr., explained the decision in a statement, “Today’s transaction is a pivotal milestone. It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.”
He continued, “We are retaining full flexibility for growth and strategic optionality with one of the world’s leading healthcare companies, and we are pleased that our BioPharma colleagues will join a strong, established team at Danaher.”
Retaining full control of GE Healthcare will likely dim the immediate prospect of an IPO for the business, and Culp stressed that refining the overall business is key to his restructuring of the business.
Danaher, is a global conglomerate that has a portfolio covering the manufacturing and healthcare sectors – its subsidiaries include Pall, which it acquired in 2015.
The BioPharma business generated revenues of $3bn in 2018 for GE Healthcare, stated GE, with a side of the business being responsible for process chromatography hardware and consumables, cell culture media, single-use technologies, development instrumentation and consumables.
Organic growth for the overall GE Healthcare business was up by 6% year-on-year in fourth quarter financials.
