GE to Spin Off Health Care Business

GE to Spin Off Health Care Business

NEW YORK (AP) -- The Wall Street Journal is reporting that General Electric plans to spin off its health care business and sell its stake in Baker Hughes, a company that provides services to the oil industry.

The paper cited anonymous sources who said a decision is due to be presented to investors on Tuesday.

GE would sell 20 percent of the health care unit and distribute the rest to its shareholders over the next 12 to 18 months, the paper said. It would take two to three years to sell its two-thirds stake in Baker Hughes, valued at around $23 billion.

The moves would be the conclusion of a mission CEO John Flannery was given last year to reshape the company. The Wall Street Journal said GE's board approved the latest decision and there would be no further plans to sell other divisions.

GE's overhaul plan grew more radical in recent months. The company has shrunk dramatically since it became entangled in the financial crisis a decade ago and Flannery has vowed to shed $20 billion in assets quickly.

The plan's presentation would come on the same day as the Boston-based company will be dropped from the Dow Jones industrial average, ending the conglomerate's more than 100-year run in the 30-company blue chip index.

GE shares closed at $12.75 on Monday, down from their high of $60 a share in August 2000.

The stock-price slide is a key factor in GE's exit from the Dow, which is calculated using the prices of 30 large, or "blue chip" stocks from various U.S. industries.

The low price of GE shares means the company has a weight in the index of less than one-half of one percentage point, S&P Dow Jones Indices said.

The report of a further business spin-off helped them edge up in premarket trading, with a gain of 1.8 percent to $12.98.

(KA)