General Electric Life Sciences

Performance Indicators

In 2015 revenue of medical division of GE Healthcare which is one of the largest in the structure of holding reached $17.6 billion from which about $4 billion fell to the share of Life Sciences.

History

2019: Danaher purchased biopharmaceutical business of GE Life Sciences for $21.4 billion

On February 25, 2019 General Electric announced sale of biopharmaceutical business (two thirds of division of GE Life Sciences which is a part of GE Healthcare are the share of it) Danaher companies for $21.4 billion Danaher reports that the transaction will be fully completed to the fourth quarter 2019.

According to information published by the Business Insider edition, the management of Danaher for the first time addressed GE with the offer on purchase of its division of BioPharma in April, 2018. But the head of GE of that time John Flanneri and his closest advisers rejected this offer. Replacement of the leadership of GE in October and arrival to it of the former long-term CEO Danaher of Larry Kasp promoted resumption of negotiations about the possible transaction, and in January of the 2019th its parts were previously approved by both parties.

As a result of GE will receive about $20 billion net proceeds which is going to use for a covering of the debt which was for the end of December, 2018 of $121 billion.

GE Healthcare sold biopharmaceutical business for $21.4 billion the IPO now questionable

Danaher reports that the transaction will be fully completed to the fourth quarter 2019.

The division purchased from GE will join Danaher as independent business. It is expected that the biopharmaceutical structure will bring to the new owner about $3.2 billion income in 2019. GE Life Sciences proposes solutions for carrying out biological researches and clinical therapy, including tools for researches, search of drugs, diagnostics and bioprocessing.

At emergence of news about the transaction of the stock GE and Danaher jumped up in the price though GE still cannot recover former corporate glory completely. In two years by February of the 2019th the company lost two thirds of the market value because of a number of operational and investment errors. Among the main problems - inept management by orders and transactions in energy business and also long-term insurance bonds. Earlier made efforts on restructuring failed, and the company should take more aggressive measures for repayment of the debt.

After the transaction of GE also revaluated development plans in the field of health care, and IPO GE Healthcare in 2019 now questionable. The company concentrated attention are aimed on completion of the transaction selling biopharmaceutical business which makes 15% of all segment of health care of the company, and on management of the remained divisions.^[1]

2018: Sales of division of BioPharma - $3 billion or 15% of revenues of GE Healthcare

The division of BioPharma in 2018 brought in the general moneybox of the company about three billion dollars (about 15% of total income in a GE Healthcare segment) from which more than $2.5 billion Software were the share to estimates of many market analysts of sales of different biotechnology products, BioPharma was considered as the most promising component of a biomedical segment of GE providing steadily high margin for the last several years.

The division of BioPharma is engaged in development, marketing and sale of the innovation account biomaterials, in particular a special protective film of Fortem, in production of the chromotographic equipment, creation of technologies and materials for cultivation of cellular cultures, different medical devices and so forth.

2016

The plan of opening of 4 plants in Ireland

In September General Electric reported that it is going to open four new plants on production of drugs in Ireland. The company announced that it will invest €150 million ($167 million) in a biopharmaceutical campus in the county Cork, Ireland. Customers from GE will manage and own the new plants. It is supposed that the plants will create 500 jobs. It is expected that the company will begin to build the plants in Cork next year.

GE considers that the components made by them will be 25-50 percent cheaper, than the traditional plants necessary for creation of complex medicines. Also on production of similar components only 18 months, but not 3 years, as usual are required.

The first plant of this kind was constructed by JHL Biotech company in China and already began to work. The enterprise is intended for production of inexpensive copies of biotechnology medicines.

Creation of the new plants will allow GE to increase the presence in the market of medical technologies. GE technologies are already used for creation of the leading antibodies, the company is also going to become the large supplier in new area of cellular therapy.

Plans for preserving of business

On March 11, 2016 the management of General Electric (GE) announced plans to save division of Life Sciences in spite of the fact that the corporation focuses on the heavy industry, Bloomberg reports.

At a meeting with investors the head of General Electric Healthcare John Flannery reported that the concern aims to increase investments into fast-growing business which Life Sciences is. In 2016 sales will increase at least by 10% here, the top manager said.

General Electric will not touch medical business of 44 billion

The corporation pays more and more attention to heavy machinery (gas turbines, jet engines, etc.) in this connection in 2015 she sold financial assets for the amount more than $150 billion and reduced the division which is responsible for release of consumer home appliances.

Rumors went that the similar fate can comprehend and Life Sciences. So, the analyst of RBC Capital Markets Deane Dray in March, 2016 assumed that GE can contract medical business as it was made by other industrial companies, such as Siemens. However John Flanneri let know that the company will actively support this direction further.

This market has fundamental perspectives of growth, and we take very strong competitive positions here. We are sure that business will be able quicker to grow in GE, than outside corporation — the head of General Electric Healthcare said.

He also noted that plans of GE for expansion of business in the market of health care were difficult feasible because of the overstated cost of the companies which GE could purchase therefore the decision to focus on purchase of small firms was made.^[2]

Notes