Key Takeaways
- General Electric is set to complete the final phase of its spinoffs into three separate companies Tuesday, with GE Vernova splitting from GE Aerospace.
- GE Vernova will be the new standalone energy company, with GE Aerospace focused on the company’s aviation technology products.
- GE first announced the move in 2021, and GE Healthcare Technologies was spun off last year.
General Electric (GE) will complete the changes it first announced in 2021 before markets open Tuesday, spinning off its energy-focused division from the aerospace division, with the entities becoming GE Vernova and GE Aerospace, respectively.
GE Healthcare Technologies was spun off last year, and now trades under the ticker “GEHC.” GE Vernova will trade under “GEV” starting Tuesday morning, and GE Aerospace will continue trading under the company’s longtime “GE” ticker, the company announced in October.
GE Vernova will also join the S&P 500 index Tuesday morning, replacing Dentsply Sirona (XRAY), which will be moved to the S&P Midcap 400 on Wednesday. Shareholders that were on record as of March 19 will be eligible to receive one share of GE Vernova for every four shares of GE stock they owned.
The company has been on the road to these spinoffs for years, as it has sold a number of subsidiaries and undergone several restructurings since the financial crisis of 2008. The November 2021 announcement that it planned to split into three companies was the latest attempt to emphasize profitability and attract investors.
GE took a massive hit during the pandemic, as its Aerospace division, the company’s biggest in terms of revenue, was hit particularly hard by the significant drop in air travel, with GE stock hitting a 28-year low of $34.22 in May 2020.
Chief Executive Officer (CEO) Larry Culp told investors when the split was first announced in 2021 that the company believed it was “under-owned” in each of its categories of healthcare, energy, and aerospace, at least in part because the size of the company may have intimidated investors who only wanted to invest in a healthcare company.
While down 0.65% at $174.39 at 1:22 p.m. ET Monday, GE stock is up about 40% in 2024 and more than 80% in the last 12 months. GE Healthcare was down 1.7% to $89.36 but is up about 15.5% this year and 53% since it spun off.