The fate of GE’s offshoots
The break-up of the General Electric empire, one of the largest corporate divorces in history, was widely hailed on Wall Street as a slam-dunk success.
But the performance of its offshoots has not been uniformly positive — as revealed by the deals struck by GE Aerospace and its smaller sibling GE HealthCare over the past month — and the re-emergence of Nelson Peltz’s Trian Fund Management on the latter’s shareholder register.
GE HealthCare, which was first spun off in early 2023, on Monday announced a nearly $1bn deal to buy radiopharmaceutical company Sofie Biosciences from mid-market private equity group Trilantic Partners, confirming a DD scoop from last month. Bank of America, Consello and Solomon Partners advised on the acquisition.
The deal, the healthcare group’s second largest, comes as the group considers offloading its patient care solutions division and stares down Trian, which has boosted its stake to a $200mn position. Trian played an instrumental role in GE’s three-way split.
While GE’s healthcare offshoot is focused on tuck-in deals, GE Aerospace, led by chief executive Larry Culp, the mastermind behind the original break-up, is taking bolder swings, striking an $11.75bn deal in September to buy Warburg Pincus-backed Consolidated Precision Products.
The acquisition of CPP is a classic vertical integration, with GE Aerospace buying a supplier of coatings used in turbine production, as the wider industrial sector faces a squeeze on the supply of critical parts.
Shares in GE Aerospace have roughly doubled since the break-up, giving it a market value of $321bn, while power company GE Vernova has seen its market capitalisation increase sevenfold to $264bn as it rides the AI power boom. By contrast, GE HealthCare is up just 14 per cent since its first trading day.
For some of the GE offshoots, they are in full dealmaking mode. For others, the break-up continues.