General Electric Company (NYSE: GE) announced on Monday that it has agreed to sell its BioPharma business to Danaher Corporation (NYSE: DHR) for USD 21.4 Billion. GE shares rose by 13.6% shortly after the opening bell on Monday.
GE’s biopharma unit is being divested from its GE Life Sciences segment. In 2018, the biopharma business reported revenue of approximately USD 3 Billion. It provides instruments, consumables, and software that support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs.
Pharmaceutical Diagnostics is part of GE Life Sciences and will remain within the GE Healthcare Portfolio. The business supplies contrast media and molecular imaging consumables for radiology customers around the world and is highly complementary to GE Healthcare’s medical imaging business.
GE Chairman and Chief Executive Officer H. Lawrence Culp, Jr. said, “Today’s transaction is a pivotal milestone. 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.”
Danaher said the business unit will be a stand-alone operating company within its USD 6.5 Billion Life Sciences segment, joining the Company’s Pall, Beckman Coulter Life Sciences, SCIEX, Leica Microsystems, Molecular Devices, Phenomenex and IDT businesses.
Danaher expects that the acquisition will reduce GAAP diluted net earnings by USD 1.15 to USD 1.20 per share, but will be accretive to Non-GAAP by approximately USD 45 cents to USD 50 cents per share.
Danaher’s President and Chief Executive Officer, Thomas P. Joyce, Jr., said, “GE Biopharma is renowned for providing best-in-class bioprocessing technologies and solutions. This acquisition will bring a talented and passionate team as well as a highly innovative, industry-leading product suite to our Life Sciences portfolio, providing an excellent complement to our current biologics workflow solutions.”
GE said it expects to use the proceeds from the transaction to reduce leverage and strengthen its balance sheet.
The transaction is expected to close in the fourth quarter of 2019.