GE Healthcare will become standalone company following a year-long strategic review by General Electric CEO John Flannery.
The healthcare spinoff will be completed in the next 12-18 months, GE said in an announcement on Tuesday. It comes less than three months after the company sold off its health IT unit for $1 billion.
Keiran Murphy, who currently serves as GE Healthcare’s president and CEO, will continue in his role at the independent company. GE expects to cash out 20% of its interest in the healthcare business and distribute the remaining 80% to shareholders.
The company also plans to allocate $18 billion in debt and pension obligations to the healthcare company.
“GE Healthcare’s vision is to drive more individualized, precise and effective patient outcomes,” Murphy said in a statement. “As an independent global healthcare business, we will have greater flexibility to pursue future growth opportunities, react quickly to changes in the industry and invest in innovation. We will build on strong customer demand for integrated precision health solutions and great technology with digital and analytics capabilities as we enter our next chapter.”
GE Healthcare recorded $19 billion in revenue in 2017, with an operating profit of $3.5 billion. On an investor call, Murphy said the company would maintain core offerings in imaging and diagnostics while “continuing to invest heavily in digitization and automation.”
He added the newfound independence will allow the company to move faster and to keep pace with growth in the digital technology sector to assist with clinical decision-making. The company plans to scale precision health offerings through “disciplined, bolt-on acquisitions with prudent divestitures” while making investments in AI and machine learning.
On an investor call, Flannery said separating the healthcare unit would “likely lead to a reduction in the aggregate GE dividend.” GE Healthcare’s new board of directors plans to determine its dividend policy once the spinoff is complete.