GE’s Health-Care Split Should Put Creditors First
There may be better ways to leverage the business than IPO’ing a 20 percent stake.
Running diagnostics.
Photographer: Daniel Acker/Bloomberg
General Electric Co. CEO Larry Culp is honoring his promise to urgently address the company’s massive debt load. The best options to do so may be the ones that also give him the most flexibility.
The industrial conglomerate has reportedly filed confidentially for an initial public offering of its health-care unit, which sells MRI machines as well as cell-therapy technologies. This isn’t too surprising: Culp said in October that he agreed with the general thrust of former CEO John Flannery’s plan to make the health-care business an independent entity. But there was always the possibility he might change his mind, much like he did on the prospect of an equity raise, having first ruled it out before later indicating he might consider selling shares “as conditions change in the future.”