GE Healthcare IPO in 2019 ‘unlikely’ after $21.4B deal with Danaher

General Electric (GE) announced on Monday, Feb. 25, that it has entered into a definitive agreement to sell its biopharma business to Danaher Corporation for $21.4 billion. This could significantly impact the company’s plans for an initial public offering (IPO) for GE Healthcare.

“Today’s transaction is a pivotal milestone,” H. Lawrence “Larry” Culp, Jr., GE’s chairman and CEO, said about the Danaher deal in a prepared statement. “It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet. We are retaining full flexibility for growth and strategic optionality with one of the world’s leading healthcare companies, and we are pleased that our BioPharma colleagues will join a strong, established team at Danaher.  A more focused portfolio is the right structure for GE, and we have many options for maximizing shareholder value along the way.”

The business being divested, a part of GE Life Sciences, generated approximately $3 billion in revenue in 2018, according to GE. GE’s pharmaceutical diagnostics division, also a part of GE Life Sciences, will remain with GE Healthcare.

The biggest news to come out of this transaction is that it could mean a considerable change in GE’s plans for the immediate future. Culp told CNBC that GE is now reconsidering its plans for a GE Healthcare IPO, which was expected to take place later in 2019.

“An IPO in 2019 looks unlikely at this point,” he said to CNBC’s Morgan Brennan.