GE, an industrial conglomerate pioneer, to break up

GE, an industrial conglomerate pioneer, to break up
# 09 November 2021 19:55 (UTC +04:00)

General Electric (GE.N) said on Tuesday it would split into three public companies as the storied U.S. industrial conglomerate seeks to simplify its business, pare down debt and breathe life into a battered share price, APA reports citing Reuters.

The split marks the end of the 129-year-old conglomerate that was once the most valuable U.S. corporation and a global symbol of American business power. GE shares jumped 7% in early trading, reaching a nearly 3-1/2 year high.

GE has faced investor skepticism about its ability to turn a corner since the 2008 financial crisis, while struggling with rising debt. The company was also removed from the Dow Jones Industrial Average in 2018 following years of sliding valuation.

GE's revenue for 2020 was $79.62 billion, a far cry from the over $180 billion in revenue it booked in 2008.

In 2015, activist investor Nelson Peltz took a stake in GE and demanded changes at the company, including moving away from finance operations toward its industrial roots.

The company's stock, however, continued to underperform and was seen to have prompted former Chief Executive Jeff Immelt's departure.

Larry Culp, who became the company's first outsider CEO in 2018, was tasked with boosting cash flow and reducing debt.

The company has since spun-off or sold several of its businesses in an effort to streamline its bewildering structure.