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GE to sell healthcare unit and Baker Hughes stake

Plans to spin off the healthcare business and divest its stake in oil-field services provider Baker Hughes, amidst growing concerns over the cash-strapped company’s ability to sustain its current dividend program.

The move takes the industrial juggernaut closer to its goal of raising $20 billion by selling various industrial assets as part of an extensive restructuring program planned over three years.

In the current fiscal year $GE to exit assets worth $10 billion under the program. The healthcare unit will be divested over a period of 12-18 months. It is looking to slash debt by $25 billion and achieve corporate cost savings of more than $500 million by the end of 2020.

The massive restructuring program, which primarily involves divestiture of loss-making units, is aimed at focusing more on the core businesses of power, jet engine, and renewable energy. While the power business is in the negative territory, the renewable energy unit is currently generating meager profits.

Earlier this week, GE announced the divestiture of its distributed power unit to buyout group Advent for $3.25 billion. Last month, the company sold its transportation unit, which manufacturers train locomotives, to Wabtech for $11 billion. While being able to exit some of the non-core businesses successfully, GE is facing difficulties in finding a buyer for the lighting division, a business it pioneered during the initial years of establishment.