Investment Banking Spotlight: GE, Johnson & Johnson, Philips, Siemens: Restructurings = Accelerating Focus and Investment
By Greg Benning and Susmita Roy, with Jonathan P. Gertler, MD
Boston-based General Electric recently announced it will split into three separate companies, focusing on healthcare, aviation, and energy. GE Healthcare in turn, will focus on precision healthcare, completing its spin-out in early 2023.
With these steps, GE joins other large conglomerate restructurings including, Siemens, Johnson & Johnson and Philips, who have each completed or announced spinoffs, restructurings and strategic re-focusing. While GE’s aviation and energy businesses are gems, a healthcare investor looking to put $100M into a precision medicine investment doesn’t necessarily have the time, expertise, or interest in understanding those industries, so a decision to buy GE stock today versus another more focused opportunity arguably goes in the other direction enough to create the valuation discount GE is now trying to address.
