GE Healthcare: The position of the General Electric subsidiary in the medical technology market

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Powerful medical technology: A computer tomograph from the manufacturer GE Healthcare

Photo: Martin Schutt/ dpa

The US company General Electric is often associated with two people.

On the one hand with the company

, who made a name for himself as an inventor in the field of electricity as early as the 19th century.

And on the other hand with the manager

, who died in 2020, who converted General Electric into a huge conglomerate from 1981 to 2001 with the help of a brutal takeover strategy, which at times rose to become the most valuable company in the world.

Consequently, Welch was named "Manager of the Century" by the business magazine "Fortune" in 1999.

But those times are over.

Over the years, the conglomerate has developed into a confusing and hardly controllable conglomerate.

The acclaimed Welch planted the seed for the downfall himself by building up a global financial business with GE Financial, thereby embellishing industrial profits for years.

Welch's successor ,

, brought General Electric to the brink of bankruptcy during the 2009 financial crisis.

He then switched to further takeovers and balance sheet acrobatics, but was unable to stop the decline on the stock exchange and in the operational business.

General Electric not only fell in market cap, but also in importance, although the company is still very large with about 170,000 employees and sales of $74 billion as of 2021.

From the point of view of the current GE boss

(59), who replaced the hapless Immelt in 2018, GE is still too big - and above all too confusing.

He wants to split the group into three main areas: energy, aviation and medical technology.

With this split strategy, Culp is lagging behind its German rival Siemens, which has long since spun off the energy and medical technology sectors.

GE Healthcare starts today on the Nasdaq

The field of medical technology is now also making a start at GE and is now being traded on the Nasdaq for the first time as GE Healthcare Technologies under the abbreviation "GEHC".

In addition, the stock will be listed in the S&P 500 index, just like the parent company's stocks.

"By creating three industry-leading, global public companies, everyone can benefit from greater focus, tailored capitalization and greater strategic flexibility," said Culp when announcing the plans in November 2021. "The demerger will make the group stronger."

Aviation GE Aerospace, the largest and most profitable unit, will continue to be managed as the main company by Culp.

(43) will take over the combined GE Vernova renewable energy, power and digital business.

Here the spin-off will take place at the beginning of 2024.

The most important competitor is Siemens Healthineers

One step further is

's $17 billion business

and is now also taking it public.

In the Covid 19 pandemic, medical technology supported the rest of the group financially.

The remaining parent company will now retain a 19.9 percent stake in GE Healthcare.

The new shares went to the GE shareholders, for every three shares in General Electric there was one new share in GE Healthcare.

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"Improved precision care":

is CEO of GE Healthcare

Photo: PR

At an investor day in December 2022 on the Nasdaq in New York, Arduini announced that it would continue to focus on the powerful business areas of imaging, ultrasound, solutions for patient care and pharmaceutical diagnostics.

Above all, the use of digital solutions that enable more precise care for patients around the world should ensure growth.

The enormous amounts of data generated by hospitals and clinical networks are to be used via the "Edison" digital platform for improved precision care.

In this way, Arduino and its employees would like to seize the opportunities in the rapidly growing segments of the healthcare market.

The most important division of GE Healthcare remains imaging, which generates around 50 percent of sales.

A direct competitor, especially in this area, is the medical technology group Siemens Healthineers.

The companies Siemens, Philips, Alstom and ABB have been pursuing similar splitting strategies as General Electric for years.

Larry Culp's plans are well received by experts.

"Once the three areas separate, they're going to get a new set of investors," says

, an industry analyst with Melius Research who has followed General Electric for more than 20 years, in a Wall Street Journal report.

Based on his earnings projections, he estimates the future enterprise value of GE Aerospace at $94 billion, GE Healthcare at $48 billion and GE Vernova at just under $13 billion.