It will maintain a 19.9% stake in the healthcare unit. Aviation is the most profitable part of GE’s business.
The company produces jet engines, aerospace systems, replacement parts and maintenance services for commercial, executive and military aircraft including fighters, bombers, tankers and helicopters.
The company has spent years undoing its massive transformation under Jack Welch, an era of unbridled growth that gave birth to sprawling conglomerate in the 1980s and 1990s. From lightbulbs to appliances or healthcare to financial services, General Electric had a hand in it.
During the late-1990s boom, GE’s soaring stock price made it the most valuable company in the world. GE’s revenue grew nearly fivefold during Welch’s tenure, and the firm’s market capitalization increased 30-fold.
However, the financial crises of 2007-2008 revealed the how exposed GE was to risk, particularly through its financial division.
In 2015, GE announced a radical transformation of the company, vowing to shed billions in assets to better focus on the company’s industrial core, namely power, aviation, renewable energy and healthcare. That led to some tumult in leadership.
CEO Jeff Immelt replaced by John Flannery in 2017, who was ousted just a year later with Culp taking over and vowing a massive corporate transformation.
The company said Tuesday that it expects operational costs of approximately $2 billion related to the split, which will require board approval.
The Boston company also announced Tuesday that it expects to lower its debt by more than $75 billion by the end of the year.
Shares jumped more than 8% before the opening bell.