As part of a broader restructuring, General Electric plans to spin out its healthcare segment in 2023.
GE Healthcare, which includes medical devices, software and diagnostics, will become a separate, publicly traded entity. GE would keep a 20% stake in the company.
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In a press release announcing the spin-out, GE said it would become a “pure-play company at the center of precision health.”
By spinning off two of its segments into new companies, the conglomerate hopes its efforts will be more focused, and that the new entities would have more flexibility to pursue growth opportunities. GE Healthcare would be headed up by Peter Arduini, who was tapped to become the CEO of the division starting in January of next year.
GE CEO and Chairman Larry Culp said in a news release that the changes would allow GE to “realize the full potential of each of our businesses.”
Last year, GE’s healthcare division brought in $18 billion in revenue. It develops MRI, CT scan, X-ray machines and other diagnostic devices. It also sells software to be used for clinical monitoring, ICU management and anesthesia delivery.
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As with other medical device companies, the pandemic had an effect on GE’s business. It saw increased demand for ventilators, x-ray machines, monitoring solutions and other products related to the pandemic. At the same time, it saw reduced demand for other products, such as MRI machines and contrast agents.
In September, the company bought BK Medical, expanding its ultrasound business into the operating room.
The spinoff is part of a broader restructuring by GE as it looks to turn around its business and reduce its debt. In 2019 GE sold its pharmaceutical business for $21.4 billion to Danaher. The company also plans to spin out its energy business in 2024, leaving GE’s core business focused on aviation.
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