General Electric, the storied American manufacturer that struggled under its own weight after growing to become a sprawling conglomerate, will divide itself into three public companies focused on aviation, healthcare and energy.
"It's over now," said Nick Heymann of William Blair, who has followed GE for years. "In a digital economy, there's no real room for it."
The company has already rid itself of the products most Americans know including its appliances and last year, the light bulbs that GE had been making since the late 19th century when the company was founded.
The announcement Tuesday marks the apogee of those efforts, divvying up an empire created in the 1980s under Jack Welch, one of America's first chief executive "superstars."
GE's stock became one of the most sought after on Wall Street under Welch, routinely outperforming peers and the broader market. Through the 1990s, it returned 1,120.6% on investments. GE's revenue grew nearly fivefold during Welch's tenure, and the company's value increased 30-fold.
Yet the stock began to lag in the summer of 2001, the waning days of Welch's rule. As the decade came to a close GE was struck by near ruin with the arrival of the worst financial crisis since the Great Depression. General Electric's vulnerabilities were laid bare and the epicenter was GE Capital, the company's financial wing.
Shares lost 80% of their value from the start of 2008 into the first few months of 2009 and have only recently begun to recover. The stock is up 30% this year as the asset sales keep coming, and shares rose 2.7% in heavy trading Tuesday.
GE's aviation unit, it's most profitable, will keep General Electric in the name. GE will spin off its health care business in early 2023 and its energy segment including renewable energy, power and digital operations in early 2024.
GE Chairman and CEO Larry Culp will become nonexecutive chairman of the health care company, with GE maintaining a 19.9% stake in the unit. Peter Arduini will serve as president and CEO of GE Healthcare effective January 1, 2022. Scott Strazik will become CEO of the combined renewable energy, power, and digital business. Culp will lead the aviation business along with John Slattery, who will remain its CEO.
The company said Tuesday that it expects operational costs of approximately $2 billion related to the split, which will require board approval.
The Boston company also announced Tuesday that it expects to lower its debt by more than $75 billion by the end of the year.
Information for this article was contributed by Stan Choe of The Associated Press.