Investing.com - Shares in General Electric (NYSE:GE) surged nearly 15% at the open on Monday as the company announced that it signed a deal to sell its biopharma business to Danaher (NYSE:DHR) for $21 billion.
The deal will be the first major sale under new Chief Executive Officer Larry Culp, and drastically advances his plan to cut the industrial conglomerate's debt load
“It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet," Culp, who took over in October as CEO, said in a press release.
The biopharma business accounted for 15% of GE's $20 billion in healthcare business revenue in 2018.
Culp told CNBC on Monday that the sale of the unit may derail prior plans to spin off the rest of the healthcare division.
"An IPO [for GE Healthcare] in 2019 looks unlikely at this point,” he admitted.
Under pressure from collapsing earnings at its power engineering business, GE last year slashed its dividend, changed its CEO and began a massive asset sale.
At 9:38 AM ET (14:38 GMT), GE shares soared 15.17% to $11.71. GE has gained more than 50% year-to-date as it continues its rebound from $6.66 per share, its lowest price since the 2008 financial crisis hit when investors worried over the conglomerate's chances for survival.
GE plans to deliver its 2019 outlook via conference call on March 14.