November 17, 2021 – In spinning off its healthcare business, General Electric Co. is betting on the fast-growing diagnostic-imaging-equipment market, a sector facing disruption from artificial intelligence and growing competition from startups as well as established players, according to a report by The Wall Street Journal.
The company announced last week that GE Healthcare will be spun off in early 2023, with GE planning to retain a 19.9% stake in the new company. GE named Peter Arduini, current CEO of Integra LifeSciences, to lead the division, effective in January. Integra LifeSciences is a maker of surgical instruments and other medical products.
GE’s healthcare unit is the world leader in the medical-imaging equipment market with a share of around 26%, closely followed by Siemens Healthineers with 21% and Philips with 17%. The GE division, which has more than four million installed units world-wide, generated about $18 billion in revenue last year.
Kieran Murphy, GE Healthcare’s departing chief executive officer, said last week that as a stand-alone company it would have more freedom to invest in innovation and flexibility to react quickly to changes in the industry.
The global market for equipment for medical imaging—including ultrasounds, MRIs, X-rays and CT scans—was worth around $22 billion in sales globally in 2020, according to healthcare technology data provider Signify Research. The figure doesn’t include software and services, a highly profitable add-on.
The company faces competition from established players such as Siemens Healthineers AG and Koninklijke Philips NV, as well as startups focused on AI and fast-growing players in China.
In splitting up, GE is following a strategy similar to Siemens AG, which spun off its healthcare business in 2018. Philips has sold its lighting, television and entertainment divisions in recent years as the Dutch company focuses on healthcare.