The deal will see Danaher pay $21 billion in cash, as well as assume certain GE pension liabilities.
The GE Life Sciences unit will join Danaher's Life Science as a stand-alone business. The GE biopharma unit is expected to generate about $3.2 billion in revenue this year. Danaher expects the deal to be complete by the fourth quarter.
GE shares traded as high as $11.75 a share in early trading before shedding some gains to close up 6.4 percent at $10.82 a share. Danaher's stock also jumped 8.5 percent to close at $123.15 a share.
"We are focused on completing the carve out [of the biopharma business] – which is 15 percent of the $20 billion healthcare segment – and focused on managing the remaining core business," GE Chairman and CEO Larry Culp told CNBC's Morgan Brennan.
Cowen Research said in a note to investors that this deal came at "a rich valuation that goes a long way towards GE's debt reduction."
"Sale of biopharma a positive," Credit Suisse said in a note. "Under CEO Culp, GE has been accelerating its strategy to strengthen and deleverage the balance sheet."
Additionally, GE announced plans to provide shareholders with its 2019 forecast on March 14.