General Electric shares are higher by 8% after the announcement to divest its biotechnology business to Danaher for $21.4 billion. The cash strapped industrial giant secured $20 billion in cash and roughly $400 million in pension liabilities. With over $100 million in debt, General Electric CEO Culp delivered his first big step in addressing the companies balance sheet.
General Electric also is pulling the plug on the healthcare IPO plan, a move that is positively viewed on the street as that business is healthy and could help continue to deliver cash flow for them.
GE may also not be done wheeling and dealing as they are exploring options to sell imaging business.
The deal was also very positive for Danaher and will deliver $0.45 to $0.50 in the first full year post acquisition. Shares of Danaher were also higher by 8%, with the S&P 500 index rising by 0.6%.
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Ed Moya