U.S. industrial giant General Electric will split into three companies following years of seeing its stock underperform, the company announced Tuesday.
The company will be divided into separate units focused on aviation, health care and energy. GE plans to spin off the health-care unit by early 2023 and the energy unit by early 2024, the company said in a news release.
GE shares, which were already up 55% over the last 12 months, rose more than 2% on Tuesday even as the broader market pulled back.
"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," CEO Lawrence Culp said in a statement accompanying the announcement. "We are putting our technology expertise, leadership, and global reach to work to better serve our customers."
The moves are a ways off so specific naming decisions have not yet been made, but the current General Electric will be the aviation-focused company.
General Electric was co-founded in the late 1800s by Thomas Edison and went through several transformations over the last century as the U.S. economy changed, becoming a leader in appliances, jet engines and power turbines.
The conglomerate expanded rapidly in the 1980s under the late Jack Welch, getting into financial services and back into broadcasting with the purchase of NBC, sporting enviable earnings growth and returns for investors along the way.