General Electric Co. (NYSE: GE) stock jumped 17.11% to $11.91 in premarket trade on Monday after the industrial giant agreed to sell its biopharmaceutical business to Danaher Corporation for $21 billion in cash, plus pension obligations. Danaher stock (NYSE: DHR) was also up $7.52, or 6.63% to $121.00 from its previous close of $113.48 per share.
The deal is valued at $21.4 billion with Danaher expected to pay $21 billion in cash and assume certain GE pension obligations. Both companies expect to close the transaction in the fourth quarter of calendar year 2019, subject to customary conditions, including receipt of applicable regulatory approvals.
GE Chairman and CEO H. Lawrence Culp, Jr. said, “Today’s transaction is a pivotal milestone. It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet. We are retaining full flexibility for growth and strategic optionality with one of the world’s leading healthcare companies, and we are pleased that our BioPharma colleagues will join a strong, established team at Danaher.”
The biopharmaceutical business, part of GE Life Sciences, posted revenues of $3 billion last year. General Electric intends to use the proceeds from the deal to strengthen its balance sheet and reduce leverage. GE stock is down more than 80% from its all-time high and has lost more than 30% of its value in the last 12 months.
Danaher’s President and CEO, Thomas P. Joyce, Jr., said, “GE Biopharma is renowned for providing best-in-class bioprocessing technologies and solutions. This acquisition will bring a talented and passionate team as well as a highly innovative, industry-leading product suite to our Life Sciences portfolio, providing an excellent complement to our current biologics workflow solutions.”
General Electric Profile
General Electric is a multinational conglomerate corporation offering infrastructure and investment in energy infrastructure projects worldwide. The Company operates in various segments, including power and water, oil and gas, energy management, renewable energy, aviation, healthcare, transportation, appliances, energy connections and lighting, GE capital, and more. – Craft
Danaher Corp. Profile
Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services. The Company’s Life Sciences segment provides stereo microscopes, and filtration, separation, and purification technologies. Its Diagnostics segment provides chemistry, immunoassay, microbiology, and automation systems, as well as hematology and flow cytometry products.
The Company offers analytical instruments, reagents, consumables, software, and services for critical care settings. Its Dental segment provides consumables, equipment, and services to diagnose, treat, and prevent dental disease. The Company’s Environmental and Applied Solutions segment offers instrumentation, services, and disinfection systems to analyze, treat, and manage water. This segment also provides equipment, software, services, and consumables for packaging, printing, marking, coding, and traceability applications. – Craft