June 26 (Renewables Now) - As a result of its strategic review, General Electric Co (NYSE:GE) will focus on aviation, power and renewable energy in a move to create a "simpler and stronger" company.
The plans, which have been unanimously approved today by GE's board of directors, include making GE Healthcare a standalone company and fully separating GE's 62.5% interest in Baker Hughes, a GE company (NYSE:BHGE) over the next two to three years.
"We are aggressively driving forward as an aviation, power and renewable energy company—three highly complementary businesses poised for future growth," said GE chairman and chief executive John Flannery. He expressed confidence that the new plans together with previous changes will lead to improved operating results and increased shareholder value going forward.
GE aims to strengthen its balance sheet by reducing Industrial net debt by about USD 25 billion (EUR 21.4bn) by 2020. The company is continuing with efforts to shrink GE Capital and targets sales of USD 25 billion in energy and industrial finance assets by 2020.
With respect to GE Healthcare, GE expects to monetise 20% of its interest in the business and to distribute the remaining 80% to shareholders through a tax-free distribution. These transactions are expected to be completed over the next 12 to 18 months.
Following the announced sales of Distributed Power, Industrial Solutions and Value-Based Care, and pending combination of GE's Transportation business with Wabtec, the company said its USD-20-billion divestiture goal is substantially achieved.
(USD 1 = EUR 0.857)