GE's Most Interesting Business After the Break-Up Will Be...
Now that the dust has settled on the news of General Electric's (NYSE: GE) break-up plans, it's time to take a closer look at the new companies to come. There's no doubt that the GE Healthcare spinoff and the portion of the company that won't get spun off will be the stronger two, but I think the third business will be the most interesting. Here's why investors should not be quick to dismiss the combination of GE Power, GE Renewable Energy, and GE Digital.
As a reminder, GE's plans involve spinning off GE Healthcare in early 2023 (with GE retaining a 19.9% stake in the new company), and then combining GE Power, GE Renewable Energy, and GE Digital into one business and spinning that off in 2024. What's left will be an aviation-focused company.
One thing that's unclear at this point is how much debt each of the three companies will take with them under the plan. What is known is that management plans for each of them to have balance sheets that qualify their debt as investment-grade when the separations are complete. Management should have the financial flexibility (not least through its equity in Baker Hughes and AerCap, and the 19.9% stake GE will hold in GE Healthcare after the spinoff) to ensure that.
Source Fool.com
