LONDON (ShareCast) - (Sharecast News) - General Electric will spin off its healthcare division and sell its stake in Baker Hughes, the oil services company, as the ailing US conglomerate sheds peripheral businesses and seeks to cut its debt.


GE said after reviewing its strategy it would concentrate on aviation, power and renewable energy to create a simpler, stronger company. Disposing of healthcare and Baker Hughes will put GE on track to cut net debt by $25bn (£19bn).

GE Healthcare will be a separate company and GE will unload its 62.5% stake in Baker Hughes over the next two to three years. The company said it would generate cash from 20% of the healthcare business and distribute the rest to shareholders tax-free.

The company has sold off a series of businesses in the past year including distributed power, industrial solutions and value-based care. It is also selling its transportation arm to Wabtec. GE said its $20bn divestment target was almost complete.

John Flannery, GE's chairman and chief executive, said, "Today marks an important milestone in GE's history. We are aggressively driving forward as an aviation, power and renewable energy company-three highly complementary businesses poised for future growth. We will continue to improve our operations and balance sheet as we make GE simpler and stronger."

The latest divestments are part of a clearout at GE that has seen the company, once admired as for its wide range of businesses even as conglomerates dropped out of favour, forced to shed divisions.

Burdened by large debts and damaged by poor investment decisions, the company has seen its share price halved in the past year, prompting its ejection from the Dow Jones Industrial Average after more than 100 years in the index.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE