General Electric, which has endured a number of setbacks since relocating its headquarters from Fairfield to Boston in 2016, is selling its biopharma business to Danaher Corp. for $21.4 billion, $21 billion of it in cash.
GE Chairman and CEO Larry Culp ”“ who was the CEO at Danaher from 2001 to 2014 ”“ said the transaction represented “a pivotal milestone. It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.
“A more focused portfolio is the right structure for GE,” Culp added, “and we have many options for maximizing shareholder value along the way.”
Last year the biopharma business, part of GE’s life sciences division, generated revenues of about $3 billion. The business comprises process chromatography hardware and consumables, cell culture media, single use technologies, development instrumentation and consumables, and service.
Pharmaceutical diagnostics, currently part of GE’s life sciences, will remain within the GE health care portfolio. That business supplies contrast media and molecular imaging consumables for radiology customers around the world and complements GE health care”™s medical imaging business. GE”™s pharmaceutical imaging agents are used in approximately 90 million patient procedures each year.
GE health care has a global base of more than 4 million imaging, mobile diagnostic and monitoring units. In 2018 that business, excluding biopharma, generated approximately $17 billion of revenue with midteens operating profit margins.
The transaction with Danaher is expected to close in the fourth quarter of 2019, subject to regulatory approvals and customary closing conditions.
While news of the deal was greeted enthusiastically by investors ”“ GE”™s shares climbed 65 cents on Monday to $10.82, their highest level since Oct. 29 ”“ it can be seen as another sign of the conglomerate”™s shrinking influence on the world stage.
Plans for the move to high-profile headquarters in Boston have been revised downward several times, most recently on Feb. 14, when GE announced it was downscaling those plans and, as a result, would be returning $87 million that Massachusetts spent as part of an incentives package to lure the company from Fairfield.
Ten months after GE promoted John Flannery to CEO in August 2017, the company was delisted from the Dow Jones Industrial Average ”“ after being a part of it for 110 years ”“ in favor of Walgreens Boots Alliance. In October of last year, Flannery was dismissed after a little more than a year on the job and replaced by Culp.
