(Reuters) – General Electric on Tuesday completed its breakup into three companies, marking the end of an era for the industrial conglomerate pioneer that was once a symbol of American business power.
The industrial giant’s aerospace and energy businesses will begin trading on the New York Stock Exchange as separate entities on Tuesday, more than a year after its healthcare business began trading on the Nasdaq.
The breakup is a culmination of CEO Larry Culp’s efforts to breathe life into the company that ran into struggles, including the 2008 financial crisis that nearly bankrupted its most profitable business, GE Capital.
In late 2021, Culp announced the breakup that had eluded a generation of insiders after the company had grown vastly in size as it entered diverse businesses under predecessors.
Such was GE’s significance that its finance arm was deemed “too big to fail” by the U.S. government.
But as it lurched from crisis to crisis, GE, an original member of the blue chip Dow Jones Industrial Average, lost its place in the index in June 2018 and Culp, who took over as CEO after a few months, cut its dividend to a penny to conserve cash.
He started informally discussing the idea of a breakup with advisors in 2021, Reuters had reported.
Culp, who is now the CEO of GE Aerospace, will ring the NYSE opening bell on Tuesday, along with Scott Strazik, CEO of energy business Vernova.
Some Wall Street industrial analysts have been handing over coverage of GE to their aerospace and energy counterparts and have reminisced covering a company that emerged after famed inventor Thomas Alva Edison merged Edison General Electric Co with a rival to form GE in the late 1800s.
Analysts now estimate the market value of GE Aerospace, which has been a cash cow for the Boston-based company, at more than $100 billion after the spinoff.
“With the successful launch of three independent, public companies now complete – today marks a historic final step in the multi-year transformation of GE,” Culp said on Tuesday.
Last month, GE Aerospace, which makes engines for Boeing and Airbus jets, forecast operating profit of about $10 billion in 2028 on robust demand for its products and services, and said it was targeting an initial dividend payout at 30% of net income.
The business will trade on the NYSE under the GE symbol. GE Vernova will trade under the symbol GEV.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Arun Koyyur)
Source Agencies
