General Electric has finally found a buyer for its electricity business and will sell off the end-user-facing business after more than 120 years of operation.
Boston-based GE tell today will transition the electricity business to Savant Systems, a smart home management company also based in Massachusetts. The companies did not disclose the financial terms of the deal, but the sources said Wall Street Journal that the transaction is valued at about 250 million dollars.
Savant specializes in comprehensive smart home systems for the luxury market. Adopting a direct electricity business will allow you to take advantage of vertical integration and gain more control over the physical equipment you install in consumer homes. Savant will keep business operations in Cleveland, where it is currently based, and will receive a long-term license to maintain GE’s trademark use for its products.
The electrical business is GE’s oldest division, dating all the way back to the company’s foundation through several mergers with Thomas Edison companies in the late 1880s and early 1890s. The company became consolidated in early, investing in various technology and communication businesses. It moved into aviation and energy and away from consumer products through the 1980s and 1990s under CEO Jack Welch. That company’s philosophy lasted into the 21st century, under CEO Jeff Immelt, from 2001 until 2017.
As of 2017, though, GE is carrying a staggering amount of corporate debt—about $77 billion, analysts estimate—and GE’s stock price has plummeted through Immelt’s tenure. In October 2017, the new CEO, John L. Flannery, promised to streamline the company’s operations and divest $20 billion worth of businesses.
Flannery held the top seat for one year before being replaced in October 2018 by H. Lawrence Culp. Culp, who is still CEO today, continued trying to sell GE’s unprofitable businesses. He incorporated his railroad business, called GE Transportation, with Wabtec in 2018, in an $11 billion deal. GE Life Sciences business followed, going to Danaher Corp. in 2019 for about $20 billion.
The fire money was actually one of the first on the chopping block, but it took three years to finally find a buyer for the Savant.
“Today’s transaction is another important step in GE’s transformation into a more focused industrial company,” Culp said in a written statement. “Together with Savant, GE Lighting will continue its pursuit of innovation, while we at GE will continue to advance the infrastructure technologies that are core to our company and draw on the roots of our founder, Thomas Edison,” though GE now owns it. off last Edison’s original business.