GE to split into 3 public companies

Stock up almost 30% this year as aviation, health care and energy will be focus

General Electric, the storied American manufacturer that struggled under its own weight after growing to become a sprawling conglomerate, will divide itself into three public companies focused on aviation, health care and energy.

It is the culmination of an arduous, years-long reshaping of a symbol of American manufacturing might that could signal the end of conglomerates as a whole.

“It’s over now,” said Nick Heymann of William Blair, who has followed GE for years. “In a digital economy, there’s no real room for it.”

The company has already rid itself of the products most Americans know, including its appliances, and last year, the light bulbs that GE had been making since the late 19th century when the company was founded.

The announcement Tuesday marks the apogee of those efforts, divvying up an empire created in the 1980s under Jack Welch, one of America’s first CEO “superstars.”

GE’S stock became one of the most sought after on Wall Street under Welch, routinely outperforming peers and the broader market. Through the 1990s, it returned 1,120.6% on investments. GE’S revenue grew nearly fivefold during Welch’s tenure, and the company’s value increased 30fold.

Yet the stock began to lag in the summer of 2001, the waning days of Welch’s rule. And as the decade came to a close GE was struck by near ruin with the arrival of the worst financial crisis since the Great Depression. General Electric’s vulnerabilities were laid bare and the epicenter was GE Capital, the company’s financial wing.

Its shares lost 80% of their value from the start of 2008 into the first few months of 2009 and has only recently begun to recover as the company unwinds much of what Welch built. The stock is up almost 30% this year as the asset sales keep coming.

Shares in General Electric Co. ended Tuesday up $2.87, or 2.7%, to $111.29, a new high for the year.

GE’S aviation unit, its most profitable, will keep General Electric in the name. GE will spin off its health care business in early 2023 and its energy segment — including renewable energy, power and digital operations — in early 2024.

The decision to split at GE was well received Tuesday, both in general markets and by those who had pushed for the change.