GE to sell biopharma biz for $21B, postpone healthcare IPO

General Electric Company (GE) is selling its biopharma business to Danaher for $21.4 billion, the company announced Feb. 25. With a definitive agreement signed between the two parties, GE’s previous plan to spin off its healthcare sector with its own initial public offering is likely put on hold, GE Chairman and CEO Larry Culp told CNBC.

GE previously filed confidential paperwork for an IPO for its healthcare unit at the end of 2018. The offering was originally expected to take place in 2019. Danaher is a global science and technology entity with more than 20 operating companies and 71,000 associates.

"An IPO [for GE Healthcare] in 2019 looks unlikely at this point," Culp told CNBC.

GE Biopharma provides instruments, consumables and software to support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs. The business is expected to generate $3.2 billion in 2019. The acquisition by Danaher is expected to be completed in the fourth quarter of 2019.

“We expect GE Biopharma to advance our growth and innovation strategy in an important and highly attractive life science market,” Danaher President and CEO Thomas Joyce, Jr. said in a statement. “We see meaningful opportunities to harness the power of the Danaher Business System to further provide GE Biopharma's customers with end-to-end bioprocessing solutions that help enable breakthrough development and production capabilities.”

The change in plans for GE doesn’t mean the IPO for the healthcare segment is completely off the table. GE Healthcare accounted for almost 16 percent of the company’s total sales and more than 40 percent of its operating profit in 2017, about $19 billion in revenue, CNBC reported. The intent to spin off the healthcare unit was to allow GE to focus on its core industry and energy businesses.

Upon news of the biopharma deal, GE shares surged nearly 8 percent by end-of-day trading Monday.