Why GE Is Trading Higher On Tuesday Premarket?

  • General Electric Co GE plans to form three global public companies focused on the growth sectors of aviation, healthcare, and energy.
  • The company to pursue a tax-free spin-off of GE Healthcare, creating a pure-play company at the center of precision health in early 2023, in which GE expects to retain a stake of 19.9%. GE also intends that Healthcare will issue debt securities, the proceeds of which will be used to pay down outstanding GE debt.
  • GE Renewable Energy, GE Power, and GE Digital to be combined into one business, positioned to lead the energy transition, and then pursuing a tax-free spin-off of this business in early 2024.
  • Post the spin-offs, GE will be an aviation-focused company shaping the future of flight. Through the transition, GE will monetize its stakes in AerCap Holdings NV AER and Baker Hughes Co BKR, prioritizing further debt reduction. 
  • GE will retain other assets and liabilities of GE today, including run-off insurance operations. 
  • The company expects to incur one-time separation, transition, and operational costs of ~$2 billion and tax costs of less than $0.5 billion.
  • GE said it is on track to reduce debt by more than $75 billion by the end of 2021.
  • Price Action: GE shares are trading higher by 6.71% at $115.7 during the premarket session on Tuesday.
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