The firm founded by Thomas Edison will split into three separate companies (aviation, health, energy). It was in the year 2000 the first capitalization of the world.
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General Electric (GE), it’s over. The US company announced on Tuesday, November 9, that it would split into three separate listed entities on the stock market, one specialized in aircraft engines, the second in energy and the third in health. Thus is the epilogue of an American legend: GE, it is the firm founded by Thomas Edison in 1892 which prospered on the electricity fairy.
This is the ultrasuting conglomerate developed at the end of the XX e century by its mythical boss Jack Welch: in the year 2000, General Electric had become the first market capitalization of the planet, valued $ 594 billion (512 billion euros). Welch Matured the stock market saying that companies did not turn into a dusk conglomerate, but to refocus on a single job.
This worked because this boss was a brute, who would save the activities that did not grow enough and still went forward, developing a powerful financial branch with GE Capital. This strategy did not survive him for a long time, after his departure in 2001. Under his President Jeffrey Immelt, who will remain until 2017, the firm took full force the financial crisis of 2008 and has relieved its financial activities. It has hesitated and has embarked on costly acquisitions, including that of Alstom in France, in 2015, for 12 billion euros, while the gas market was up to the highest.
deleveraging drastic
In June 2018, the firm, by force of being dismantled, weighs more than $ 115 billion on the stock market: it is excluded from the Dow Jones index, of which it had been part of its creation in 1896. Four months later, new bubble, the boss of GE John Flannery is limited after only fourteen months in power, while the stock market price was divided by two in one year, while a $ 20 billion provision is spent on its unfortunate acquisitions including Alstom. It is replaced by an external personality, Larry Culp.
This one pursues a strategy of deleveraging but hopes to avoid dismantling by organizing the group’s refocusing on its high-growth trades (health, aircraft engines, turbines), without giving health. He drastically reduced the group’s debt, for example, transferring airplane leasing activities for $ 30 billion. This has not been enough, the Group’s market valorization continuing to be disappointing (about $ 120 billion, with a decline of 20% in ten years and stagnates since the arrival of Mr. Culp).
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