GE Healthcare, part of the American conglomerate General Electric, will invest almost half-a-billion dollars over the next several years to digitalize its business but has no plans to follow its rival Siemens Healthineers with a venture into the stock market, the unit’s Chief Executive John Flannery told Handelsblatt.
“We will spend about $500 million in the digitalization of our business through 2018,” he said, affirming plans first announced back in 2013. “We will increase the number of software specialists, as well as the number of data analysts and data experts.”
GE Healthcare has been unsuccessfully trying to challenge Siemens for the market leadership in the German healthcare industry for years. The unit employs 54,000 people and generated $18.4 billion in revenue last year.
Years ago, the U.S.-based company announced that it will double its market share in Germany without revealing any specific figures. Its biggest challenge this year will be to face down a planned float by Siemens Healthineers, which could easily become Germany’s biggest IPO of the year. Even if the company only floats a minority stake in its newly renamed unit, the volume of the IPO could amount to up to $9 billion (€8.6 billion).
While a similar IPO would inject a tremendous amount of cash into GE Healthcare that could help fund expansion and acquisitions, Mr. Flannery said it goes against the company’s philosophy.