General Electric Plans to Buy Health Care Units from Thermo Fisher ScientificHealthcare Training Resource
January 8, 2014 — 939 views
General Electric Co. (GE) recently announced its plan of acquiring businesses from Thermo Fisher Scientific Inc. GE will be buying some assets of Thermo Fisher for approximately $1.06 billion. It plans on buying magnetic beads and gene modulation businesses from the company.
This purchase of magnetic beads, gene modulation and cell culture units will allow Fairfield, Connecticut-based bolster technologies of GE to manufacture and discover new medicines, diagnostics and vaccines, according to the company statement.
Acquisition will Strengthen GE
This year, GE will be focusing on acquisitions with the aim of investing in the consumer-finance division. It is concentrating on its health care unit as it is marching towards hi-tech businesses that have good potential for growth and also have attractive margins. CEO of the company, Jeffrey Immelt, had mentioned in December that he has seen quite a few good deals but that there is always scope for improvement. He feels that earnings and margins at the company’s health care unit need to improve this year as it accounts to 13 percent of the total revenue of the firm.
John Dineen, Chief Executive of GE Healthcare, stated that Life Sciences account for one of the fastest-growing as well as strongest business areas of the company. Also this area is driven by the demand of the world for safe as well as new medicines and improved diagnostics. According to him, this deal will help the company in getting much better and will help it in realizing its vision of making available better health care at a lower cost to people.
Thermo Fisher Cashing on the Sale
Thermo Fisher is the biggest supplier in the world when it comes to lab testing equipment by market value. It agreed to sell certain units last year in November for getting approval from European regulatory for its deal of $13.6 billion for buying Life Technologies Corp, which is involved in mapping equipment and genetic testing.
ISI Group LLC analyst, Ross Muken, believes that this announcement will help Thermo Fisher in acquiring Life Technologies. According to him, the timing of this sale by Thermo is likely to have a good impact on the company as it will serve as a pleasant surprise for most of the investors.
This acquisition is expected to be sealed in this year’s first half, after the regulatory approval. GE stated that these three businesses together generated an annual revenue of approximately $250 million last year.