General Electric Co CEO John Flannery faces a tight two-year race to shed more than $20 billion in assets through dozens of deals and pare down the U.S. industrial conglomerate into three core businesses: power, aviation and healthcare.
GE’s assets could collectively be worth up to $30 per share, brokerages such as Melius Research LLC have suggested, even as its shares now hover around $19 after losing 40 percent of their value year-to-date. Successfully completing these divestitures would help narrow the valuation gap.
Shedding GE’s unloved assets, however, will require a combination of M&A transactions and spinoffs that can be time-consuming and uncertain. For example, GE cannot spin off the most valuable of the assets it has earmarked for disposal, its 62.5 percent stake in oilfield services company Baker Hughes worth $23 billion, until July 2019, according to the terms of an agreement it has with that company. Read More…
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