"You can see the tide beginning to turn where we can really focus on a little less defense, a little more offense". GE's pharmaceutical imaging agents are used in approximately 90 million patient procedures each year. At the time, GE Chief Financial Officer Jamie Miller said GE had been attracting interest on some of its business units but was "looking to do deals that are smart for the company". "It is clear that nobody in his job before him - John Flannery or Jeff Immelt - would have probably been able to pull off this transaction with Danaher", William Blair & Co analyst Nicholas Heymann said.
GE jumped 6.4 percent to $10.82 at the close in NY, the highest level since October 29. The shares have advanced 34% this year through Feb 22, the biggest gain on a Standard & Poor's sub-index of United States industrial companies.
GE CEO H. Lawrence Culp Jr. had positioned the company to spin off its health care unit later this year. In mid-November they had dropped to as low as 77 cents on the dollar.
Danaher shares were advancing 8.97 percent to $123.66 premarket.
"Rarely do we see both the acquirer and the seller's stocks react so positively on a deal announcement". "This stock reaction underscores the win-win nature of the deal".
The massive all-cash deal will greatly boost Danaher's $6.5 billion life sciences unit, with the GE business expected to post $3.2 billion in revenue this year. Excluding BioPharma, GE Healthcare had sales of about $17 billion in 2018.
As Reuters reports, the deal "will provide GE with a much-needed cash infusion as [it] struggles to pay off" more than $100 billion in debt amid stagnating growth.
General Electric is selling its biopharma business for $21.4 billion, with shares in the company jumping 16 percent upon the news... The deal not only eases those concerns, but it also shows that Culp is doing what he was brought in to do: Break with GE's past missteps and make changes, quickly.
The biopharmaceutical business makes up most of GE's life-sciences operations.
GE also on Monday closed the merger of its transportation business with Wabtec.
"We're going to focus on improving our core imaging business while we evaluate other options". A GE spokeswoman said Culp's personal holdings are not public. It bought Cepheid, a molecular diagnostics and medical testing company, for about $4 billion in 2016. He is GE's first CEO to be hired from outside the company. At the end of 2018, pensions represented $21 billion of GE's $55 billion in industrial debt. The company has so far lost two-thirds of its value in the last two year.
Merrill Lynch has a Buy rating and raised its price objective to $137 from $116 in its call.
"The transaction Danaher shareholders have been clamoring for finally came true", Muken said.