GE HealthCare Considers Stake Sale in China Division Amid Market Challenges

GE HealthCare, a leading player in the global medical technology industry, is reportedly exploring options for a potential stake sale in its China division. This strategic move comes as the company navigates a complex landscape of market challenges, including recent declines in revenue and ongoing geopolitical tensions affecting international trade.

Potential Stake Sale and Market Valuation

According to a recent Bloomberg report, GE HealthCare is in the early stages of considering a stake sale in its China operations. The deal, if it materializes, could value the company's total assets in China in the billions of dollars. This division currently employs approximately 7,000 people across multiple research and development and manufacturing sites, focusing on both imaging and radiopharmaceuticals.

The consideration of such a significant move underscores the importance of the Chinese market for GE HealthCare. In 2024, the company reported revenues of $2.13 billion from sales in China, making it the third-largest market after the United States and Europe.

Market Challenges and Revenue Decline

GE HealthCare's strategic considerations come in the wake of notable market challenges. The company experienced a 15% year-over-year decline in revenues from China in 2024, affecting all business segments. This downturn has been attributed to several factors:

1. The conclusion of COVID-era stimulus programs that had boosted sales in 2023.
2. Ongoing anti-corruption campaigns in China that have led to tightened hospital spending.
3. The imposition of new tariffs on trade between the U.S. and China.
4. Escalating restrictions on exports of critical materials, including rare earth minerals.

These challenges are not unique to GE HealthCare, as fellow imaging giants Philips and Siemens Healthineers have reported similar annual declines in the Chinese market.

Strategic Responses and Industry-Wide Impact

In response to these challenges, GE HealthCare has already taken several strategic steps:

1. The company revised its 2025 financial guidance earlier this year, despite reporting higher-than-expected revenues.
2. It announced plans to decrease the number of transpacific shipments subject to tariffs.
3. GE HealthCare is pursuing more local-for-local manufacturing and distribution across its international supply chain.

The medical technology industry as a whole is grappling with similar issues. The Chinese government's recent anti-dumping investigation into international makers of CT X-ray tubes has added another layer of complexity to the market dynamics, although GE HealthCare's leadership has stated they do not expect this probe to have a material effect on their business within the country.