GE To Sell BioPharma Business To Danaher For $21.4 BillionBusiness Wire
- Accelerates GE’s strategy to reduce leverage and strengthen the balance sheet
- Strong go-forward $17 billion healthcare business
- Expected to close in the fourth quarter of 2019
GE Chairman and CEO H. Lawrence Culp, Jr. said, “Today’s transaction is 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. We are retaining full flexibility for growth and strategic optionality with one of the world’s leading healthcare companies, and we are pleased that our BioPharma colleagues will join a strong, established team at Danaher. A more focused portfolio is the right structure for GE, and we have many options for maximizing shareholder value along the way.”
GE Healthcare President and CEO Kieran Murphy said, “The BioPharma business has been a strong contributor to our success, and I am confident this agreement represents a great opportunity for our valued colleagues to flourish under the ownership of Danaher. GE Healthcare has unsurpassed scale and scope and we will continue to focus on our investments so that we deliver better outcomes and more capacity to a world striving for Precision Health.”
The BioPharma business being divested is part of GE Life Sciences. In 2018, the BioPharma business generated revenues of approximately $3 billion. It is a leading provider of instruments, consumables and software that support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs. 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 Life Sciences, will remain within the GE Healthcare portfolio. This business supplies contrast media and molecular imaging consumables for radiology customers around the world and is highly complementary to GE Healthcare’s medical imaging business. GE’s pharmaceutical imaging agents are used in approximately 90 million patient procedures each year.
GE Healthcare has a global installed base of more than 4 million imaging, mobile diagnostic and monitoring units. In 2018 this business, excluding BioPharma, generated approximately $17 billion of revenue with mid-teens operating profit margins. The business is a leader in imaging, monitoring and diagnostics, and also provides services, accessories, consumables, education, training and consulting.
The transaction is not subject to a financing condition or a shareholder vote.
PJT Partners LP, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Goldman Sachs acted as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to GE on the transaction.
GE is also announcing the expected dates for the following upcoming investor events:
- Week of February 25: Annual report release, including annual letter and 10-K
- March 5: H. Lawrence Culp, Jr., GE Chairman and CEO, to present at J.P. Morgan Aviation, Transportation & Industrials conference
- March 7: GE Insurance teach-in conference call for investors
- March 14: GE Outlook conference call
- March 19: Jamie Miller, GE CFO, to present at Bank of America Merrill Lynch Global Industrials and EU Autos conference
More details on these events will be posted to GE’s Investor Relations website at www.ge.com/investor.
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Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the planned sale of our Biopharma business announced today; our strategy and plans for the remaining portion of GE Healthcare, and the characteristics of that business in the future; plans to exit our equity ownership position in Baker Hughes, a GE company (BHGE) and the expected benefits to GE; capital allocation plans; GE’s and GE Capital’s capital structure, liquidity and access to funding; our de-leveraging plans, including leverage ratios and targets, the timing and nature of specific actions to reduce indebtedness, credit ratings and credit outlooks; divestiture proceeds expectations; future charges and capital contributions that may be required in connection with GE Capital’s run-off insurance operations or other GE Capital portfolio actions; revenues; organic growth; cash flows and cash conversion, including the impact of working capital, contract assets and pension funding contributions; earnings per share; future business growth and productivity gains; profit margins; the benefits of restructuring actions; our businesses’ cost structures and plans to reduce costs; restructuring, goodwill impairment or other financial charges; tax rates; or returns on capital and investment.
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