General Electric CEO Larry Culp is turning to his former company as he continues to dismantle of GE.
Danaher, the industrial company Culp ran for years, agreed on Monday to buy GE’s BioPharma business. The deal will raise $21.4 billion for GE, which is racing to fix its debt-riddled balance sheet by selling off major pieces of its empire.
The BioPharma unit, part of GE Life Sciences, makes instruments and software that support the research and development of pharmaceuticals. It brought in $3 billion in revenue last year.
GE promised to use the proceeds to cut down mountain of debt. Crucially, GE said that Danaher agreed to assume the pension obligations as part of the deal.
“Today’s transaction is a pivotal milestone,” Culp said in a statement. “It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.”
Culp was hired to turn around slumping GE last fall, becoming the conglomerate’s first ever outsider CEO.
A person familiar with the matter told CNN Business that there is “absolutely no conflict” here because it’s a good deal and speeds up GE’s deleveraging plan. The source said that all GE transactions, including this one, are vetted by outside advisors and the board.
