General Electric on Tuesday it will spin off its health-care business and divest its stake in oil-services company Baker Hughes, leaving the once-sprawling conglomerate focused on jet engines, power plants, and renewable energy.

The changes aim to reward battered shareholders and strengthen GE's balance sheet by reducing debt, building up cash and further shrinking GE Capital, GE said. Shareholders will receive 80 percent of the value of GE Healthcare as a tax-free distribution, GE said.

GE shares jumped 5.2 percent at $13.41 in premarket trading.

The company will spin off the profitable healthcare unit over the next 12 to 18 months, and sell its Baker Hughes stake over two to three years, it said.

The moves, which conclude a year-long strategic review, mirror moves that Wall Street analysts had called for a year ago.

The remaining businesses "share similar technologies and industrial markets, in contrast to limited synergies that exist with GE Healthcare," Fitch analyst Eric Ause said in a note.

The changes leave GE with some of its best- and worst-performing units. Aviation has been highly profitable, but the power business profit has tumbled as sales of plants and services have slowed, and renewable energy profit margins are in the single digits.

The spinoff of its healthcare unit follows a similar move by rival Siemens, which floated its medical business as a separate company, Siemens Healthineers, in March.

GE faces tough competition for medical imaging machines, which include MRI scanners and ultrasound devices, from such rivals as Philips and Siemens, as well as Asian upstarts.