NEW YORK: General Electric announced Monday it will sell its Biopharma unit to Danaher for $21.4 billion in cash as it reduces debt amid an ongoing corporate turnaround effort.

The transaction allows the company to slim down further, and covers instruments and software that support research and development of biopharmaceutical drugs, a business that comprises about 15 percent of the revenues of GE’s health sector.

Shares of GE rocketed higher after the announcement. The industrial giant was thrown out of the benchmark Dow Jones stock index in 2018 amid a prolonged slump in its power business that badly hit share price.

“Today’s transaction is a pivotal milestone,” said GE Chief Executive Lawrence Culp. “It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.”

“A more focused portfolio is the right structure for GE, and we have many options for maximizing shareholder value along the way,” Culp said.

Culp, who served as chief executive of Danaher from 2001 to 2014, was tapped to lead GE in September.

GE’s Biopharma business — under GE Life Sciences — garnered revenues of about $3 billion in 2018, compared with about $17 billion for GE health assets not included in the deal, which includes radiology and other diagnostic imaging systems.

GE had previously planned to monetize about half its healthcare business, perhaps through a publicly-floated spin-off. Some analysts expressed concerns that divesting health care could harm the company’s cash position.

Culp told Bloomberg the company was shelving a plan for a public offering, at least for now with the Danaher deal.

Washington-based Danaher said it plans to run GE Biopharma as a stand-alone unit within its life sciences business.—AFP