GE stock up 9% after $21 billion biopharma sale to Danaher
General Electric stock is up after a blockbuster sale of its biopharmaceutical division.
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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets