The GE Brief – February 26, 2019

On Monday, GE announced plans to sell its BioPharma business to Danaher for about $21.4 billion, including $21 billion in cash. Part of GE Healthcare’s Life Sciences division, the BioPharma unit manufactures equipment and materials that help pharmaceutical companies discover and mass-produce biopharmaceuticals designed to fight diseases such as rheumatoid arthritis and psoriasis. It’s also helping vaccine developers and researchers explore immunotherapy, an emerging type of treatment that uses the body’s immune system to sniff out and kill cancer and other diseases. The deal will establish the business as a stand-alone company within Danaher’s Life Sciences platform, giving it access to additional resources to grow.

Righting the ship: Calling the deal a milestone, GE Chairman and CEO H. Lawrence Culp Jr. said it “demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.” GE Healthcare will retain the second key part of its Life Sciences business: Pharmaceutical Diagnostics, which develops contrast media used by radiologists. The unit is a global leader in pharmaceutical diagnostics for medical imaging, used in more than 90 million patient procedures each year. The BioPharma sale is expected to close in the fourth quarter of 2019.

Learn more about GE Healthcare’s deal with Danaher here.

Also on Monday, GE announced it had completed the spinoff and merger of its Transportation business with the transit and freight rail company Wabtec. The combined company, which is expected to have revenues of more than $8 billion in 2019, has about 27,000 employees in 50 countries. “This transaction is good for GE shareholders, who gain equity in an organization at the forefront of rail innovation; for GE, as we work to reduce leverage and strengthen our balance sheet; and for Wabtec, which now has a stronger and more diversified business mix to serve its customers,” said GE Chairman and CEO H. Lawrence Culp Jr.

Full steam ahead: GE Transportation has a long history of innovation, from the first electric locomotive to — more recently — the first freight locomotive to meet strict American emissions standards. Over the last decade, GE Transportation has also found lucrative work in the “transformation” of more than 2,000 locomotives for close to 40 companies around the world, overhauling the workhorse vehicles to reduce the amount of fuel they burn, increase reliability and boost their ability to haul cargo. Raymond T. Betler, Wabtec’s president and CEO, said the deal was “a once-in-a-lifetime opportunity to bring together nearly four centuries of collective experience to create a technologically advanced leader with a highly complementary set of capabilities to move and improve the world.”

Learn more here about the combination of these two storied businesses.

At Sunday’s Academy Awards, Hollywood’s biggest night, Lady Gaga took home a Best Original Song trophy for “Shallow,” the power ballad she co-wrote for a pivotal scene in last year’s remake of “A Star Is Born” — a scene that would’ve had a lot less oomph if nobody had been able to hear it. While Thomas Edison’s movie camera represented a major advance in silent motion pictures in the early 20th century, a whole other sequence of technical leaps was required to give the audiences flocking to see those flicks something to listen to. In the 1920s, American corporations competed in a mad race to bring sound to the big screen — including at GE, where two engineers hit upon a new kind of “hornless loudspeaker” to do the job.

Can you hear me now? Previously, the state of the art in terms of sound amplification was sticking a large cone, or horn, on top of a record player — which merely redirected the sound coming from the record needle. Introduced in 1925, the sound-boosting design that GE’s Edward Kellogg and Chester Rice came up with still lies at the heart of modern speakers. In a basic “electrodynamic” speaker, an alternating current moves a magnet, which in turn vibrates a diaphragm that generates powerful sound waves capable of filling a theater. The next step was to find a way to synchronize the sound with the images flashing by on the screen; from there it was just a hop, skip and a jump to truly inspired marriages of motion, drama, dialogue and music, like “Wayne’s World.”

They don’t call it the Academy of Motion Picture Arts and Sciences for nothing. Learn more here about how science shaped the history of filmmaking.