GE to Spin Off Renewable Energy Business

GE’s Renewable Energy business segment will become part of a standalone GE Renewable Energy and Power company as GE plans to form three separate public companies focused on aviation, healthcare, and energy.

GE Renewable Energy and Power will be established by combining GE Renewable Energy, GE Power, and GE Digital into one business, after which GE will spin off the business in early 2024, with Scott Strazik as CEO of the new company. By combining the three business segments, the new company will be positioned to lead the energy transition, GE said.

For GE Healthcare, the company said it planned to create a pure-play business at the center of precision health and pursue a spin-off in early 2023, with GE retaining a 19.9 per cent stake. Following these transactions, GE will be an aviation-focused company.

The proposed spin-offs of Healthcare and the Renewable Energy and Power business are intended to be tax-free for GE and GE shareholders for US federal income tax purposes.

“By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees”, said GE Chairman and CEO H. Lawrence Culp, Jr.

The company said that it would, together with its current businesses, continue to serve its partners and customers throughout the transition from a single company into three separate businesses.

Regarding its plan, GE said it was in a strong position to execute the forming of three well-capitalized, investment-grade companies, as it was on track to reduce debt by more than USD 75 billion (approx. EUR 64.8 billion) by the end of 2021 and was now on track to bring its net-debt-to-EBITDA ratio to less than 2.5x in 2023.

“GE will also continue to drive operating improvements for sustainable profitable growth, and the company now expects to achieve high-single-digit free cash flow margins in 2023”, the company said.

GE’s renewable energy business currently has more than 400 GW of renewable energy installed and the newly set up company will offer a range of energy technology and services, from digitalisation of grid and electrical infrastructure gas and steam turbines, nuclear and hydro power, gas and steam turbines, to wind turbines.

GE Renewable Energy currently has one of the most powerful offshore wind turbines on the market, the Haliade-X 14 MW model.

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Back in 2019, the company installed its Haliade-X offshore wind turbine prototype with an output of 12 MW in Rotterdam, the Netherlands.

Since then, GE Renewable Energy has uprated the prototype to 13 MW and 14 MW, and the prototype has now been operating for two years, making it the first 10+ MW offshore wind turbine to achieve this milestone, according to the company.

The Haliade-X 14 MW will make its commercial debut at the Dogger Bank C project in the UK, part of the world’s biggest offshore wind farm, for whose first two phases GE Renewable Energy will deliver its 13 MW unit.