2024-04-10 22:36:11
The historic American conglomerate General Electric (GE), which had among its founders Thomas Edison more than 130 years ago, opened a new chapter in its history this Tuesday, by completing its split into three companies that will each focus on a different branch.
The group announced this move in November 2021 and then noted that it would unfold in several stages. A first division occurred in January 2023 with the creation of GE HealthCare, which brought together all of the group’s health activities.
But the official culmination of this separation occurs this Thursday, with the disappearance of General Electric as such and the emergence of GE Vernova, specialized in energy, and GE Aerospacewhich is the new name of the company that will bring together the most traditional activities of the old conglomerate.
The three firms will be listed on the stock exchange NY: one in the Nasdaq technology index and the other two in the composite index NYSE. There will be no parent company.
These are independent companies that will publish their results separately. “As independently managed companies, the business will be better positioned to deliver long-term growth and generate value for customers, investors and employees,” he explained.
GE in 2021 when it announced the spinoff. Among the “many reasons” for developing this plan is the desire to simplify the group’s activity, explained Neil Saunders, from the market consulting firm GlobalData.
Usually, these moves generate enterprise value and can improve the stock price, the analyst added. “Managing multiple divisions with many different activities is difficult for a board of directors,” he said. Saunders.
“It is also heavier in terms of communicating vision and strategy to investors,” he said. The conglomerate 3M, which produces adhesive tape and post-its among other things, also adopted the path of General Electric to separate activities in different firms. In July 2022, he announced the separation of the health branch from him. The new company, call solved It began trading on the NYSE on Monday.
“This is an important day for 3M and Solventum,” 3M CEO Mike Roman said in a statement.
Like GE, which distributed all the shares of GE Vernova among the shareholders of the old conglomerate, 3M distributed the shares of the new company among its owners.
The main company derived from the spin-off still maintains a portion of the total securities, which it will be able to subsequently monetize on the stock market.
This type of division can determine that the resulting companies end up doing business with old rivals of the original company.
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2024-04-10 22:36:11