Industrial firm General Electric completed a three-company split on Tuesday, marking the end of the 132-year-old conglomerate that was once the most valuable company in the United States and a global symbol of the country’s business power.
General Electric closed a historic cycle: it completed its division into three different companies
General Electric finally divided into three independent firmsas previously announced, focused on health, energy and aviation. In this way the end of the 132-year-old conglomerate that once was the most valuable company in the United States and a global symbol of the country’s business power.
It should be noted that the aerospace and energy business of the industrial giant began trading on the New York Stock Exchange as separate entities more than a year after GE spun off its healthcare business. GE Aerospace was the one that kept the GE symbol. For its part, the unit of GE Vernova energy made its debut under the symbol GEV.
General Electric: why it was divided
The breakup caps CEO Larry Culp’s efforts to reverse the fate of a company that seemed almost dead due to bad investments and the 2008 financial crisis which almost bankrupted its most profitable business, GE Capital.
When Culp, the first outsider to lead GE, took the helm in 2018, The company was struggling with weak profits and a mountain of debt. Its shares had fallen nearly 80% from 2000 highs and lost its place in the Dow Jones Industrial Average after more than a century on the blue-chip stock index.
The tumult led GE’s board to oust two of his predecessors in less than two years. Culp’s task of saving the struggling conglomerate became more challenging when its lucrative jet engine business fell victim to the coronavirus pandemic as global air travel plunged.
However, his focus on Paying down debt by selling assets and improving cash flows with a streamlining of operations and a reduction in overhead costs marked the beginning of a recovery.
GE slashed more than $100 billion of debt and quadrupled its free cash flow since 2018. Its market capitalization grew by about $100 billion to $192 billion.
General Electric: what’s coming
“With the successful launch of three independent public companies already completedtoday marks a historic final step in GE’s multi-year transformation,” Culp said Tuesday.
Culp, as CEO of GE Aerospace, rang the opening bell at the New York Stock Exchange on Tuesday, along with Vernova Chief Executive Scott Strazik.
GE was formed in 1892 after famous inventor Thomas Alva Edison merged Edison General Electric Co with a rival. In the years that followed, it affected every area of American life, from the supply of electricity to the sale of household appliances to the financing of mortgages.
Source: Ambito
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