Boston, MA 01/09/2013 (wallstreetpr) – General Electric Company (NYSE:GE) is expected to spend the year 2014 by delivering on its backlog, signing new business deals and most of all, retooling its operations. These are some of the efforts which started last year and are expected to reach their peak this year.
In line with these efforts, the company announced, that it is paying $1.6 billion to acquire cell research division from Thermo Fisher Scientific. This division realized estimated revenue of $250 million in 2013. The deal is expected to close in 1H2014, subject to regulatory approval. Note that General Electric Company (NYSE:GE) is keen to reduce its exposure to risks and expand presence in higher margin operations.
The company believes that its, acquisition of the now earmarked cell research division is in line with its business plan to grow revenue through its health unit. Note that GE is an industrial conglomerate with businesses spanning finance, aviation, water and energy and manufacturing among many others. The company’s presence in several businesses has been a source of both opportunities and misgivings.
The company is largely bogged down by its exposure to financial sector through its GE Capital, a unit that operates more like a bank. For this reason, the company announced last year that it would reduce this risk exposure that is front by its financial arm by spinning off its North American retail financing business.
The spin off of the North America retail finance will save the company the string of losses that it had to bear, due to is operations in the region. After this spin off, General Electric Company (NYSE:GE) plans total spin off of its financial arm by 2015. This will effectively reduce the company’s financial risk exposure and looking at what has been going on in the company, investors will be better served in this total spin off, since GE Capital has not been of much help to the company of late.
Bottom line
GE Healthcare is one of the conglomerate’s fastest growing businesses with a lot of opportunities. The company’s plans to invest $1.6 billion to shore up this segment is going to make a good business even better, and this will result in strong rewards for investors in the days to come.
