GE sets 2 April for spin-off of new wind and power giant Vernova

General Electric’s board of directors on Thursday formally approved the spin-off of power and wind division GE Vernova for 2 April with trading of its common stock in New York.

GE Vernova comprises three businesses: Electrification including grid and storage with $6.4bn in 2023 revenue, Power that encompasses gas, hydro, nuclear, and steam technologies ($17.4bn), and Wind both offshore and onshore turbines, and LM Wind Power, which designs and manufacturers rotor blades ($9.9bn).

Earlier this month, GE Vernova in a regulatory filing said it expects Wind to return to profitability this year, “driven by lower costs, better pricing, and more product standardisation and selectivity,” as well as other impacts spurred by the landmark 2022 US climate law.

Both Electrification and Power are now making money after several years of streamlining that included better cost controls and contract underwriting, lower headcount, and more product standardisation.

For Wind, GE Vernova is also moving toward a more simplified wind product suite it calls “workhorse products.” For onshore, this will centre on the 2.8-127 and 3.6-154 turbines, the 3MW platform, and a 6MW platform, the largest turbine manufactured in the US.

Onshore offerings will also include turbine repowering products and remote monitoring, services, and upgrades. GE Vernova’s onshore wind fleet consists of 55,000 turbines with 117GW installed capacity, 13% of the industry’s total gigawatts globally.

Revenue in 2023 was 12% of the global addressable wind market - the total amount of revenue those products and services could possibly generate for that segment.

About 85% of revenue was equipment sales including new turbines and repowerings with the other 15% services, including long-term agreements and “transactional” business for spare parts and repairs in support of planned maintenance outages.

Following completion of the planned spin-off, parent GE will operate as GE Aerospace, ending almost 132 years of operation as perhaps America’s best-known conglomerate.

GE was formed through the merger of several companies, one of whom was founded by legendary inventor Thomas Edison.

The launch of GE Vernova and GE Aerospace will culminate five years of aggressive restructuring by CEO Larry Culp to reduce debt and divest holdings outside its core businesses that raised significant capital.

GE’s conglomerate model had been in decline since the financial crisis of 2008-09 when its GE Capital Financial division was bailed out with $139bn in federal loan guarantees after its losses nearly caused the company to collapse.

“Today’s announcement clears the way for the historic launches of GE Vernova and GE Aerospace,” said Culp, adding, “With GE Vernova positioned to lead the energy transition and GE Aerospace set up to define flight for today, tomorrow, and the future.”