GE stock up 9% after $21 billion biopharma sale to Danaher

General Electric stock is up after a blockbuster sale of its biopharmaceutical division.

GE logo after GE stock up after biopharma sale to Danaher Source: Bloomberg

General Electric (GE) stock is up after a $21.4 billion sale of its biopharmaceutical division to Danaher. The all-cash deal helped the conglomerate’s shares rise after months of decline.

Why is GE’s stock up?

GE's shares are up after the corporation sold its biopharma unit to Danaher to help lessen its $100 billion debt. The deal will give GE much needed cash to pay its insurance liabilities as well. The biopharmaceutical division of the company makes software to support drug research. The GE Life Sciences division will combine with Danaher’s Life Science section.

The biopharma section comprises 15% of the corporation and is one of the most profitable. The subdivision is expected to bring in $3.2 billion by the end of the year to increase the company’s profits. GE chief executive officer, (CEO), Larry Culp, said that the sale will help the conglomerate focus on its core business of plane engines and power plants.

‘We are focused on completing the carve out [of the biopharma business] – which is 15% of the $20 billion healthcare segment – and focused on managing the remaining core business,’ said Culp.

‘It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet,’ added Culp.

William and Co. banking analyst, Nicolas Heymann, prasied the deal that lifted GE shares.

‘The price Danaher is paying GE is two times our[William and Co’s] expectations. This is a home run. It really turns the page now for GE to address liquidity concerns,’ said Heymann.

What’s next for GE’s shares?

GE’s partnership with Danaher may be a continuation of a positive streak for the company’s stock. The corporation’s Q4 report was better-than-expected and has led to an upswing in GE's stock. GE’s share price could continue to surge if the conglomerate continues to make major deals like its current sale to Danaher.


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