“Today marks a key milestone in GE’s plan to become three independent, laser-focused companies,” said CEO Larry Culp.
Updated at 9:01 am EST
General Electric (GE) – Get General Electric Company Report unveiled the names of its three new business units Monday as it powers ahead with its historic decision to split the industrial group into three separate public companies.
GE’s aviation unit, which the company said last month will run by CEO Larry Culp, with current CEO John Slattery moving to the role of chief commercial officer, will be named GE Aerospace. GE Aerospace is the key plank in GE’s plan to to split into three separate companies that it unveiled in December.
The group, which will assume the GE trademark, will also get a corporate logo makerover, altering the iconic blue-and-white to a new “atmosphere blue”.
GE Verona will be the name of its power and renewables division, which will also include energy financial services. The division will be run by Scott Strazik and likely spun-out into the public markets through a tax-free deal in 2024.
GE Healthcare will be the formal name of the third business unit, with plans for a Nasdaq Global Select Market listing under the ticker symbol GEHC in early 2023.
Collectively, the separations will cost around $2.5 billion, GE has said, when taxes and operational expenses are ultimately tallied.
“Today marks a key milestone in GE’s plan to become three independent, laser-focused companies,” said Culp. “Leveraging GE’s multi-billion-dollar global brand gives us a competitive advantage in our end markets, allowing these businesses to win in the future.”
“Built on a foundation of lean and innovation, these brands will continue our mission of building a world that works and provide our customers with an important reminder of the strengths they value in GE,” he added.
General Electric shares were marked 1.7% higher in pre-market trading immediately following news of the division split updates to indicate an opening bell price of $63.95 each.
Last month, Culp said the industrial group is seeing robust demand from its customer base, but cautioned that supply-chain bottlenecks remain its most significant challenge.
Speaking to the Bernstein Strategic Decisions conference in New York, Culp said delivering products to customers is a much greater challenge than finding end demand, although price remains an “imperative” for companies around the world.
Culp added that the industrial group remains focused on cost cuts, with a $2 billion ‘gross cost out target’ for 2022, through “productivity, restructuring & sourcing actions,” according to a GE presentation.
Supply chain and cost pressures are likely to last into at least the second half of the year, GE said in March, noting that the “magnitude” of these challenges would pressure growth profit and free cash flow growth as well.