Chicago
Healthcare unit spun off: Shares in US conglomerate General Electric’s spun-out medical equipment-maker GE HealthCare Technologies (Nasdaq: GEHC) began trading in New York last week. They closed 8% higher on their stockmarket debut. Spin-offs are usually a good way to drive shareholders’ returns, says David Wainer in The Wall Street Journal. They are tax-efficient and they allow the parent company to reduce complexity, where size confers no advantage. The spun-out company should be able to make better decisions faster too. But they also tend to come with baggage.
GEHC has been saddled with $15bn of debt and pension liabilities – “a big number for a company with a market capitalisation of $27bn”. That may mean no dividends for now. That said, “the case for growth as a stand-alone is a good one”. Rising demand should allow GEHC to expand its ultrasound business, while its imaging and patient-care divisions have “relatively low margins’’. “For investors with patience, investing now could pay off in a
