GE to split into three companies, ending conglomerate for good

Company will be divided into separate units focused on aviation, health care & energy

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

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. GE shares jumped 7 per cent in early trading, reaching a nearly 3-1/2 year high.

GE has faced investor scepticism 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. 

In 2015, activist investor Nelson Peltz took a stake in GE and demanded changes at the company, including moving away from finance operations toward its industrial roots.

Its stock, however, continued to underperform and was seen to have prompted former CEO Jeff Immelt’s departure.

Larry Culp, who became the company’s first outsider CEO in 2018, was tasked with boosting cash flow and reducing debt. The company has since spun-off or sold several of its businesses.