Sales and profits have been rising at the health-care unit, which accounted for about 16% of companywide sales, or $19 billion, last year. The business produces magnetic resonance imaging machines and other equipment sold to hospitals as well as laboratory supplies for biotech firms.
GE plans to sell 20% of the division, the company said, and later distribute the remainder to its existing shareholders. The newly separate company would also assume $18 billion in liabilities from its parent, people familiar with the plans said. The division will continue to be run by CEO Kieran Murphy and the separation will likely take 12 to 18 months, they added.
GE said Tuesday it expects to exit its investment in Baker Hughes over the next two to three years. GE merged its oil-and-gas business with Baker Hughes in 2016, leaving GE with a two-thirds stake in the enlarged public company. Those shares are now worth about $23 billion and executives have wavered on whether GE would hold on to the stake or pare it back.
The Baker Hughes deal was one of the last major moves by former CEO Jeff Immelt, who led GE for 16 years and left last summer amid pressure to boost profits and revive the stock price. In addition to investing in the oil patch, Mr. Immelt doubled down on the power business by scooping up assets from rival Alstom SA and sold off much of GE Capital after the financial crisis.