Is a three-way split of General Electric the most appropriate strategy to pursue for the longevity of the business, creation of shareholder value and other management considerations?
Is a three-way split of General Electric the most appropriate strategy to pursue for the longevity of the business, creation of shareholder value and other management considerations?
Founded in 1892, Boston-based General Electric (GE) has had a history of transformation, having pursued an impressive share of acquisitions, divestitures, and organic growth. From bolt-on acquisitions to enhance its existing platforms to sweeping changes in internal capabilities, GE has at times been considered the world's best-managed firm and at others, a large conglomerate in need of repositioning, rife for shareholder activism. In recent years, GE has faced critical decision point, with a growing pension deficit while funds were used for acquisitions, and a simultaneous series of management changes and growing investor concern. Since 2018, management has proposed a separation of the company into three entities. In this case, students are asked to analyze the businesses of GE, consider the pros and cons of a split, and make recommendations for the best path forward.
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