Several major manufacturing and industrial companies announced plans over the past week to divest businesses, with the potential for cutting costs, improving operations and raising additional capital. Among the firms:
Ahead of its planned split into three companies, GE announced that it will be selling its transportation and aviation businesses. The conglomerate, which has struggled with underperformance in key operations including oil and gas and power, will be left with aviation, renewable energy and health care, among others. Chief Executive John Flannery, in a memo to staff, urged other departments to follow suit, writing, “there is no easier way to unlock value than with disciplined divestitures”.
The services and consulting giant will be selling or spinning off its infrastructure and consulting arms, the company announced in an email to staff. If the deal goes through, it will sell its Alstom business, the Paris-based transport operation that handles some 75 percent of the world’s power grid service capacity.
DuPont, now being reorganized under the leadership of P&G chief executive David Taylor, announced that it will spin off its performance chemicals and seeds divisions. DuPont’s $5bn merger with Dow Chemical collapsed in December, after activist investor Dan Loeb led calls for the breakup of the chemical conglomerates. Dow did break up into three companies instead.
The German conglomerate plans to spin off its industrial automation and networking businesses by 2020, as CEO Joe Kaeser looks to reshape the company. Siemens is one of a handful of power players shaking up its portfolio, coming off of two of the most contentious mergers in the industry. Siemens said it expects the move to increase the value of the two parts by 80-100 billion euros.
Monsanto, the American agrochemicals firm, and Bayer announced plans last week to merge in an all-stock deal that values the combined firm at $62bn.The deal would unite the maker of genetically modified seeds and the chemical that creates them, but it must still get antitrust approvals from regulators in the US and Europe.