Apr 2, 2024 - Business

General Electric completes split into 3 public companies Tuesday

Data: Yahoo Finance; Chart: Axios Visuals
Data: Yahoo Finance; Chart: Axios Visuals

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.
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