Danaher (NYSE:DHR) will buy the biopharmaceutical business of General Electric (NYSE: GE) in a $21.4-billion deal, the companies announced Monday.
The deal will see Danaher pay $21 billion in cash, as well as assume certain GE pension liabilities.
The GE Life Sciences unit will join Danaher's Life Science as a stand-alone business. The GE Biopharma unit is expected to generate about $3.2 billion in revenue this year.
"We are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet," GE Chairman and CEO Larry Culp said in a statement.
Danaher approached GE with interest in acquiring the Life Sciences business last April, The Wall Street Journal reported, but GE did not pursue a deal at the time. At the time, GE Chief Financial Officer Jamie Miller said GE had been attracting interest on some of its business units but was "looking to do deals that are smart for the company."
The deal's inclusion of some GE pension liabilities will be welcome news to investors. GE has hundreds of thousands of former and current employees covered by pension plans.
At the end of 2018, pensions represented $21 billion of GE's $55 billion in industrial debt.
Danaher expects the deal to be complete by the fourth quarter. Its stock soared $9.70, or 8.5%, soon after Monday’s opening bell, to $123.28, while shares of GE jumped $1.35, or 13.3%, to $11.52
