The General Electric Co. (GE), founded in 1889 by American inventor and businessman Thomas Edison, became one of the largest industrial conglomerates in the U.S. It even became the nation’s largest company in the year 2000, worth as much as $600 billion. But GE, which currently operates businesses that span the power, renewable energy, aviation, and healthcare industries, has been winding itself down in recent years through spinoffs and divestments. These moves are part of a broader trend by companies worldwide to deconglomerate. GE recently announced plans to split itself into three separate public companies by spinning off several of its major business segments by early 2024. In its latest fiscal year (FY), FY 2020 ended Dec. 31, 2020, the company posted net earnings attributable to its common shareholders of $5.2 billion, or $0.58 per share, on revenue of $79.6 billion. The company’s market cap was $107.4 billion, as of the close of trading on Nov. 26, 2021.

GE has been a leading innovator throughout its history. Starting with Edison’s invention of the first commercially-viable incandescent lamp, the company’s earliest products included light bulbs, an electric locomotive, early X-ray machines, and an electric stove. GE was a leader in television broadcasting, jet engines, moldable plastic and silicone, and nuclear power generation. GE’s innovativeness helped to fuel its growth, but its rise to becoming an industrial conglomerate was also made possible through acquisitions, especially during the postwar conglomerate boom of the 1960s. One of the main triggers for the boom was the Celler-Kefauver Act of 1950, which banned companies from expanding through acquisitions of competitors or suppliers. The alternative for large corporations was to diversify into completely unrelated businesses. Low interest rates, which helped to finance attractive opportunities through leveraged buyouts, also helped to fuel the boom.

GE became an emblem of the conglomerate era, which included other industrial powerhouses like Siemens AG (SIE), Dow DuPont (now DuPont de Nemours Inc. (DD)), and United Technologies Corp. United Technologies merged with Raytheon Co. in April 2020 to form a combined company named Raytheon Technologies Corp. (RTX). At one point, GE simultaneously supplied power, sold consumer appliances, provided banking services, owned cable channels, and manufactured airplanes. But by the 1980s, conglomerates had begun to lose their appeal, with many large companies starting to unwind certain business operations after becoming targets of hostile takeovers or being undervalued by investors. The attack on the conglomerate model intensified following the 2008 financial crisis as activist investors pushed to break up industrial giants whose individual business segments seemed to lag the performance of independent competitors. The new trend toward leaner, more focused companies is an effort to avoid the disadvantages of the conglomerate model: management teams whose energies and resources are spread too thinly over numerous businesses, and investors unable to understand the complex nature of a company operating in numerous industries.

Some see GE’s new plan to spin off its major business segments to create three separate public companies as the end of an era for conglomerates. While the industrial sector has definitely trended towards breaking up into smaller parts, the technology sector appears to be embracing the conglomerate model, with Amazon.com Inc. (AMZN) and Google parent Alphabet Inc. (GOOGL) being two examples. But for GE, it is the end of an era.

Below, we look at five of GE’s major business segments. The first three are segments that will be part of the future split into three separate companies. The final two are segments that have been sold to other companies.

GE Healthcare

• Revenue (FY 2020): $18.0 billion
• Profit (FY 2020): $3.1 billion

GE has been a healthcare innovator almost since its founding. As early as 1896, the company was building electrical equipment for the production of X-rays. Today, GE Healthcare comprises one of the company’s primary business segments. The unit specializes in medical imaging, patient monitoring and diagnostics, drug discovery, and more. It operates in more than 160 countries and employs about 47,000 people worldwide. GE plans to spin off its healthcare unit into a separate public company in early 2023 while still retaining a 19.9% stake. The newly-formed company will be focused on precision health, an approach to healthcare that accounts for patients’ unique genetic, behavioral, and environmental characteristics.

GE Power

• Revenue (FY 2020): $17.6 billion
• Profit (FY 2020): $0.3 billion

Even before GE’s founding, Edison had already created the first electrical grid in 1882. His company has played a pivotal role in developing technology used in generating and distributing energy. GE Power offers products and technologies, such as gas and steam turbines, that use oil, gas, fossil, diesel, nuclear, or water to produce electricity. The company has also branched out into alternative forms of energy, like renewables such as wind and solar. GE Renewable Energy is another major GE business segment. The company plans to combine GE Power, GE Renewable Energy, and its GE Digital business, which provides software that helps companies to analyze and optimize their operations. These three businesses will become a single business and will be spun off into a separate public company in early 2024.

GE Aviation

• Revenue (FY 2020): $22.0 billion
• Profit (FY 2020): $1.2 billion

GE has been a leader in developing aviation technology. The company built the first U.S. jet engine, the I-A, in 1941. In 1949, GE developed the J47, which would become the most-produced jet engine in history. Today, GE Aviation designs and manufactures commercial and military aircraft engines, engine components, and electric power and mechanical aircraft systems. The unit also offers aftermarket services to support its products. GE will be a single aviation-focused company following the spinoffs of GE’s other businesses in 2023 and 2024.

GE Appliances

• Date of Sale: June 6, 2016
• Price of Sale: $5.6 billion
• Purchaser: Haier

GE began making electrical household appliances more than a century ago, and that business grew alongside the development and spread of electricity and the electrical grid. But GE, once heavily focused on making products for the home, evolved into a company more focused on software applications related to its core industrial businesses, like aviation and power. This gradual shift eventually led to the sale of GE Appliances in June 2016. The appliance division was sold for $5.6 billion to Haier, a major Chinese home appliances and consumer electronics company. In the press release announcing the sale, GE Chairman and then-CEO Jeff Immelt said, “The sale of GE Appliances is another step in the company’s portfolio transformation and its mission to become the world’s leading digital-industrial company.”

GE Plastics

• Date of Sale: Aug. 31, 2007
• Price of Sale: $11.6 billion
• Purchaser: Saudi Basic Industries Corp.

GE has also been a leading innovator in plastics, developing the first moldable plastics in 1930. Moldable plastic would become a key technology in advancing modern mass production. GE’s plastics business would grow to become a global supplier of plastic resins used in a range of automotive, healthcare, consumer electronics, telecommunications, and optical media applications. By the early 2000s, GE was transforming its portfolio of businesses through dispositions and investments in higher-growth, and higher technology businesses. The sale of GE Plastics for $11.6 billion was a key step in that process. GE sold its plastics division to Saudi Arabia-based Saudi Basic Industries Corp. (SABIC), which was one of the world’s largest petrochemical companies at the time of the transaction.

The Bottom Line

If all happens as planned, GE will become a company solely focused on the aviation industry following the spinoff of GE Healthcare in 2023 and the spinoffs of GE Power, GE Renewable Energy and GE Digital in 2024. The sale of those units mark the continuation of a strategy of winding down to become a leaner, more focused industrial company that has taken place over the past two decades. But even the above list of past divestments and future spinoffs is not comprehensive. In 2003, for example, the company was comprised of 13 individual operating segments, including consumer finance, transportation systems, commercial finance, equipment management, and even NBC Universal. GE’s latest plan to split itself into three separate public companies marks the final step in GE’s move to deconglomerate.