GE Deal With Danaher Shows Culp Is All About the Balance Sheet

General Electric Co.’s latest deal shows that CEO Larry Culp is putting creditors in the driver’s seat, and shareholders can come along for the ride for now.

GE announced on Monday that it’s selling its biopharmaceutical business to Danaher Corp. for $21 billion in cash plus the assumption of $400 million in pension obligations. The deal has a bit of intrigue — Culp spent 13 years as Danaher’s CEO — but it’s a huge step forward in his push to attack GE’s bloated balance sheet and reduce one of the largest unfunded pension balances in the S&P 500 Index. The biopharmaceutical business makes up the bulk of GE’s life-sciences operations, which were the most attractive part of the health-care division it had planned to take public. As such, Culp is putting those IPO plans on ice for now and will contemplate other options for its core imaging business. Taken together, it’s clear that GE’s creditors, rather than its stockholders, are Culp’s top priority.