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GE breaks up with itselfINTL

GE breaks up with itself

A three-way split doesn’t usually sound amicable but in this case it could be. General Electric (GE), the US-based manufacturing conglomerate, announced that it’ll be splitting itself up into three public companies. 

The split will see the company divvy up into GE Healthcare, GE Power, and GE Aviation. The move comes as the company’s been facing some troubled waters over the past few years. The firm took on large debt a few years back and had a $135b debt load in 2018. Since then the company’s been restructuring and streamlining the company — it sold off its home appliances, locomotives, most of its financial services arm, and oil & gas operations over the past few years. The split is a last-ditch effort to reduce the company to a manageable size and make each new entity more focused on its core business.

why it matters

A split isn’t that unusual — Siemens, the German tech conglomerate, sold off its energy business in May 2020, resulting in its stock now being up by 64%. GE’s share price has historically been on a downtrend, with it dropping 56% over the past five years. A split could be a fresh start it sorely needs.