General Electric agreed Monday to sell its biopharmaceutical business to Danaher for about $21.4 billion, as the troubled industrial giant sells off divisions to pay down debt and steady its business.
In selling the business, GE took another big step in what has become a drastic slimming-down of an American corporate icon.
Known for decades as a titan of US business, GE has struggled in recent years with a bevy of problems. Under a succession of leaders, the company has announced the sale or spinoff of enormous divisions, whittling down operations like finance and energy.
Last summer, GE said it planned to spin off its health care division — including the biopharmaceutical unit, which sells equipment and software to biotechnology companies — and sell its stake in a big oil field services business, Baker Hughes.
That has meant parting with divisions that are performing well. The biopharmaceutical business accounted for about $3 billion of the $20 billion in revenue that GE’s health care unit generated last year. But GE executives said the biopharma unit was not a core part of its parent division, which focuses on making medical-imaging machines and other equipment for health care providers.
H. Lawrence Culp Jr., GE’s chief executive, said it was considering options for the remaining parts of the health care business.
“Today’s transaction is a pivotal milestone,” Culp said in a statement. “A more focused portfolio is the right structure for GE, and we have many options for maximizing shareholder value along the way.”
Danaher’s chief executive, Thomas P. Joyce Jr., added in a separate statement: “GE Biopharma is renowned for providing best-in-class bioprocessing technologies and solutions.”
Under the terms of the deal, Danaher will pay about $21 billion in cash and assume about $400 million in pension liabilities at the GE unit.
Investors in GE appeared pleased by the news: Shares in the company were up 6.4 percent in trading Monday, at $10.82. Shares in Danaher were up 8.4 percent, at $123.15.
Before heading GE, Culp led Danaher until 2015. Culp’s strategy at Danaher involved a string of acquisitions that bulked up the conglomerate.
And the business being sold was part of GE’s health care unit, which had been run by Culp’s predecessor as chief executive, John Flannery.
The deal is expected to close by year end.