General Electric (GE) will be divided into three different companies each focused on different business segments: aviation, healthcare and energy.
The novelty made the shares of the US firm take off more than 10 percent in the premarket.
The industrial giant made the decision to split after years of seeing its share value lose ground amid a revenue and cost crisis.
As announced by General Electric on Tuesday, November 9, the firm will be divided into independent units focused on aviation, healthcare and energy.
GE plans to spin off the healthcare unit in early 2023 and the energy unit in early 2024.
The information, published in a Press release, surprised the world of international business. There had been no reports from analysts or large international financial media that spoke of this possibility.
“By creating three industry-leading global public companies, each can benefit from a more focused approach, more personalized capital allocation and greater strategic flexibility with the idea of driving long-term growth and value for clients, investors. and employees, ”GE said in the newsletter.
“We are putting our experience in technology, leadership and global reach to work to better serve our customers,” adds the text signed by Lawrence Culp, global CEO.
What will happen to the brand? GE’s name will remain linked to that of the aviation company after the partition is complete, but no details were given of what the other two companies will be called.
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GE’s strategy, like Toshiba’s
This Monday, in Merca2.0 we published that Toshiba has a similar plan to GE. The Japanese firm will be divided into three companies: infrastructure, devices and chips.
The idea is to do it in 2023 and the goal is for the three companies to go public.
The decision, as in the case of GE, is part of Toshiba’s strategy to strengthen its value and avoid the exit of shareholders and the collapse of the securities.
The official announcement will be this Friday, November 12. Three independent companies will be created that will have different profit structures and growth and marketing strategies according to the business segment of which they are part.