Weehawken, New Jersey – General Electric reached a significant milestone on Tuesday as the industrial conglomerate completed its transition into three separate companies. This move signifies the end of an era for the once-iconic symbol of American business power that GE once represented.
Under the leadership of CEO Larry Culp, GE’s aerospace and energy businesses officially began trading as independent entities on the New York Stock Exchange. This comes after over a year since the healthcare business started trading on the Nasdaq. Culp’s strategic efforts to revitalize the company have culminated in this decisive breakup, aiming to address the challenges GE faced, including the aftermath of the 2008 financial crisis that heavily impacted its profitable business arm, GE Capital.
The decision to split into three separate entities was a strategic move announced by Culp towards the end of 2021, marking a departure from the company’s longstanding consolidation under previous leadership. GE had expanded significantly into various industries, leading to its prominence and at one point being labeled “too big to fail” by the U.S. government.
As GE navigated through a series of crises, it faced the repercussions of losing its place in the Dow Jones Industrial Average in June 2018. Culp, who assumed the role of CEO during this turbulent period, made critical decisions to steer GE towards stability, such as slashing its dividend to conserve cash. The idea of a breakup was informally discussed by Culp with advisors in 2021 before it officially materialized.
The New York Stock Exchange witnessed the ringing of the opening bell by Culp and Scott Strazik, CEO of the energy business Vernova, signaling the launch of the newly independent GE entities. GE Aerospace, a significant revenue source for the company based in Boston, is now estimated to have a market value exceeding $100 billion post-spinoff.
With the successful establishment of these three independent companies, GE Aerospace’s future outlook appears promising. Last month, the company projected an operating profit of approximately $10 billion in 2028, driven by high demand for its products and services. Additionally, GE Aerospace aims to initiate a dividend payout equivalent to 30% of its net income.
Analysts have shifted focus to evaluating the newfound market dynamics for GE’s aerospace and energy businesses post-breakup, emphasizing the implications of this transformative change. The spinoff represents a historic final step in GE’s comprehensive transformation journey that Culp described as multi-year in scope, underscoring the significance of this strategic shift for the industrial giant.