General Electric says it will split into 3 public companies, stock surges

General Electric said on Tuesday it would split into three public companies, as the storied US industrial conglomerate seeks to simplify its business, pare debt and breathe life into a share price battered over several years.

The split marks the end of the 129-year-old conglomerate that was once the most valuable US corporation and a global symbol of American business power.

The ambitious move drove an 8.2 percent rise in GE shares in premarket trading.

GE has faced investor skepticism about its ability to turn a corner since the 2008 financial crisis, while struggling with rising debt. The company was also removed from the Dow Jones Industrial Average in 2018 following years of sliding valuation.

GE’s revenue for 2020 was $79.62 billion, a far cry from the over $180 billion in revenue it booked in 2008, as it spun off or sold several of its businesses in an effort to streamline its bewildering structure.

The Boston-based company said the three divisions would focus on energy, health care and aviation. It will combine GE Renewable Energy, GE Power, and GE Digital and spin off the business in early 2024.

GE will also separate the health care company, in which it expects to retain a stake of 19.9%, in early 2023.

In an interview with Reuters, chief executive officer Larry Culp said he did not expect the spinoff to face any regulatory or labor issue and that there was no investor pressure behind the spinoff decision.

Following the split, it will become an aviation company, which will be helmed by Culp, who took over the conglomerate’s reins in 2018.

“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,” Culp said in a statement.

Scott Strazik will head the combined Renewable Energy, Power and Digital business and Peter Arduini will lead GE Healthcare, the company said in a statement.