General Electric is losing its place on the Dow Jones Industrial Average after more than 100 years in a move that reflects a fall in the firm’s fortunes and changes to the US economy.
Walgreens Boots Alliance is to take its spot on the financial index, which tracks shares of 30 companies deemed representative of the US economy.
The change takes effect on 26 June.
The firm that runs the index said the change is meant to reflect the growth of the healthcare sector.
“Today’s change to the [Dow Jones Industrial Average] will make the index a better measure of the economy and the stock market,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.
The move follows a difficult period for General Electric.
The firm’s share price has fallen by more than 50% over the last 12 months and it has replaced its chief executive and announced a series of cuts in an effort to reposition itself.
‘Stronger, simpler GE’
General Electric said it is focused on executing the plan it has laid out to improve GE’s performance.
“Today’s announcement does nothing to change those commitments or our focus in creating… a stronger, simpler GE.”
General Electric, one of the original companies included on the Dow, traces its roots to Thomas Edison’s light bulb business in the 1890s.
It grew to become one of America’s biggest companies, an industrial conglomerate that also owned the NBC Universal media company and operated a major finance division.
Over the last decade, the firm has sold off a number of business units, including NBC, GE Capital and its appliances division, responding to losses triggered by the financial crisis and poor performance against competitors.
The firm, which employed more than 300,000 people globally at the end of last year, is seeking to sell its light bulb business. Last month the company announced a deal to offload its railroad division.
The committee that oversees the Dow, which is run by a division of S&P Global, reviews the composition of the index regularly.
It replaced AT&T with Apple in 2015.
Walgreens, founded as a neighbourhood pharmacy in 1901, has been rapidly expanding in recent years.
It leapt onto the global stage in 2012 when it acquired a stake in Alliance Boots, taking full ownership in 2014. The firm, based in Illinois, also acquired more than 1,900 stores from Rite-Aid last year.