General Electric was yesterday cleared to press ahead with its €8.1 billion acquisition of UK Amersham by the US antitrust authorities, and promptly announced a sweeping reorganisation of the business in an attempt to boost its profit growth.
The plan will see the formation of a number of business units and places healthcare - along with energy, media (NBC-Universal), transport and advanced materials - at the heart of the group.
GE chief executive Jeff Immelt said that the move is designed to restore 10 per cent annual profit growth, something that it has not achieved in a number of years. The group is now hoping to reach this target in 2005, helped by cost-savings from trimming out duplicate jobs and functions, but expects only a modest impact on profit growth next year.
Amersham will join another recent acquisition - Finland's Instrumentarium -in bolstering GE's offerings in medical imaging and diagnostics as part of a new GE Healthcare Technologies division, headquartered in the UK and headed by Amersham chief executive Sir Bill Castell.
At the time the acquisition was announced, there was a good deal of speculation that Amersham's non-imaging-based businesses - such as Amersham Bioscience which focuses on protein separation and drug discovery - might in time be hived off.
Immelt maintains, however, that this is not the case and that pharmaceuticals is a key strategic area for the reorganised group. Indeed, GE made an abortive attempt to acquire another company with pharmaceutical interests, Honeywell, in 2001, but was thwarted by antitrust objections.
GE said it was unable to place a figure on the expected job cuts or the cost savings that would follow. The new structure will be in place by 1 January 2004, according to the company.