GE intends to use the proceeds from the deal to mitigate leverage and bolster its balance sheet. Credit: Chuck Miller.

US-based conglomerate General Electric (GE) has entered into a definitive agreement to divest its Biopharma business to science and technology innovator Danaher for approximately $21.4bn.

As per the terms of the agreement, Danaher will pay $21bn in cash and assume the rest in certain pension liabilities.

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Part of GE Life Sciences, the Biopharma business offers instruments, consumables and software to support the research, discovery, process development and manufacturing of pharmaceutical products.

The BioPharma portfolio consists of process chromatography hardware and consumables, single-use technologies, cell culture media, service, and development instrumentation and consumables.

Last year, GE’s biopharma business generated approximately $3bn in revenues; Danaher expects the business to yield annual revenue of around $3.2bn this year.

Danaher president and CEO Thomas Joyce said: “We expect GE Biopharma to advance our growth and innovation strategy in an important and highly attractive life science market.

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“The biopharma business has been a strong contributor to our success, and I am confident this agreement represents a great opportunity for our valued colleagues to flourish under the ownership of Danaher.”

“We see meaningful opportunities to harness the power of the Danaher Business System to further provide GE Biopharma’s customers with end-to-end bioprocessing solutions that help enable breakthrough development and production capabilities.”

The Pharmaceutical Diagnostics division of GE Life Sciences will remain within the GE Healthcare portfolio.

This unit delivers contrast media and molecular imaging consumables for radiology customers.

GE Healthcare president and CEO Kieran Murphy said: “The Biopharma business has been a strong contributor to our success, and I am confident this agreement represents a great opportunity for our valued colleagues to flourish under the ownership of Danaher.

“GE Healthcare has unsurpassed scale and scope and we will continue to focus on our investments so that we deliver better outcomes and more capacity to a world striving for Precision Health.”

The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to be completed in the fourth quarter of this year.

After the closing of the transaction, the biopharma business will operate as a stand-alone company within Danaher’s Life Sciences subsidiary.

GE chairman and CEO H. Lawrence Culp Jr. said: “Today’s transaction is a pivotal milestone. It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.

Additional reporting by Allie Nawrat