General Electric to trisect and transition to aviation
The F110-GE-129 engine is the only engine tested and integrated on the fly-by-wire F-15EX. (Image: General Electric)
General Electric will divide into three separate companies, with a focus on healthcare, energy and aviation respectively.
General Electric announced on 9 November plans to divide into three separate, industry-leading, global public companies.
GE intends to spin-off Healthcare in early 2023, while GE Renewable Energy, GE Power and GE Digital will combine into one business in early 2024.
The remaining body of GE will transition into an aviation-focused company, shaping the future of flight.
GE Aviation is an important supplier of engines for many air forces. It has been awarded a number of significant contracts this year, including a $1.5 billion contract to supply F110 engines for the USAF’s Boeing F-15EX Eagle IIs announced 29 October.
This division is occurring as part of a restructuring project to reduce debt and reassure investors, a decision that has already paid off as stocks soared following the announcement.
It is now on track to reduce debt by more than $75 billion by the end of 2021 and bring its net-debt-to-EBITDA ratio to less than 2.5x in 2023.
As a result, GE is in a strong position to form three well-capitalised, investment-grade companies.
Fears have been raised over the impact on the UK submarine manufacturing infrastructure, as GE tried, unsuccessfully, to move facilities over to France in 2019.
Jeremy Quin addressed concerns during a recent defence committee, he stated: ‘I am pleased to confirm that there is a guarantee in place that the propulsion business [remains in Rugby] until 2024’ and added the Enterprise Act gives the power to intervene should it be necessary.
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