General Electric completes split into 3 public companies Tuesday
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General Electric — which was the most valuable public company in the world less than two decades ago — finalizes its split into three independent businesses Tuesday.
Why it matters: The house that Thomas Edison built over a century ago, and that Jack Welch expanded into an empire, is officially no more.
Driving the news: GE Vernova, the energy spinoff, will begin trading on the New York Stock Exchange this morning using the ticker symbol "GEV."
- GE Aerospace is also launching as an independent company and will continue using the classic "GE" ticker.
- The third unit, GE HealthCare, became a standalone company in 2023.
The big picture: The energy sector's transition away from fossil fuels is one of the global economy's mega-trends. While oil and gas won't be supplanted anytime soon, GE Vernova's debut comes at a critical juncture for alternative and renewable energy.
- A number of environmentally friendly domestic projects are riding the tailwinds of President Biden's signature climate legislation.
- "We believe GE Vernova is poised to preserve its leading position within a small oligopoly in the energy transition," Morningstar said in a recent analysis.
- It estimated GEV to be worth around $35 billion (but far less than GE Aerospace's estimated $140 billion valuation).
Between the lines: The former icon of American manufacturing had a market cap that almost hit $600 billion in 2000.
- GE was worth about $191 billion as of yesterday's close.
Flashback: GE's board approved Vernova's spin-off back in February along with the aerospace unit; the move gives shareholders of record 1 GEV share for every 4 GE shares.
- The sprawling conglomerate that turned Welch into a celebrity CEO has been in a years-long process of dismantling itself, and GEV's debut punctuates that evolution.
