The massive conglomerate will spin off its aviation, health care and energy divisions over the next couple of years.Shares for General Electric surged 6% in early trading Tuesday after the historic American conglomerate announced plans to split into three publicly-traded companies focused on aviation,Investors seemed to welcome the news from the major firm, with a market cap topping $126 billion, despite further details on how the split will impact shareholders not yet fully apparent.
MORE: Why some experts say corporate 'net-zero' emissions pledges could have net-zero impact on climate crisis GE said it expects to retain a stake of 19.9% in GE Healthcare, which will be the first to branch out and focus on precision health. It did not disclose the stake it plans to retain for GE Renewable Energy and Power , but said the plans are to position this offshoot of the company to"lead the energy transition" as the impacts of climate change force businesses to transition away from fossil fuels and towards renewable energy.
The independent businesses will be better positioned to deliver long-term growth, GE said, by allowing deeper operational focus, tailored capital allocation decisions, financial flexibility, dedicated boards of directors and unique investment profiles that appeal to a deeper investor base."We have a responsibility to move with speed to shape the future of flight, deliver precision health, and lead the energy transition," Culp added.
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