M&A flurry continues with $21bn Danaher bid for GE unit

GE Healthcare was supposed to be heading for an initial public offering (IPO) this year, but that looks less likely after a $21.4 billion buyout offer for its biopharma unit from medtech company Danaher. The business, which makes equipment for researching, developing and manufacturing biopharmaceuticals and had revenues of around $3 billion last year, will now operate as a separate division within Danaher’s $6.5 billion life sciences division after the closure of the deal. It’s expected to close sometime in the fourth quarter, with an IPO for the remaining health assets not likely to occur until afterward. The biopharma business accounted for 15% of GE’s healthcare business revenue in 2018.
The transaction is the first big play by new GE CEO Lawrence Culp in a turnaround plan aimed at alleviating the conglomerate’s crippling level of debt, and a run of poor quarterly results held back by its troubled power division. Biopharma is the latest divestment of a non-core business, following healthcare equipment finance and lighting operations, and it’s no surprise that it is being sold to Danaher as it is Culp’s former employer – he was CEO of the firm for 13 years.