By Matt Egan, CNN Business

(CNN) -- General Electric CEO Larry Culp is turning to his former company as he continues to dismantle GE.

Danaher, the industrial company Culp ran more than a dozen years, agreed on Monday to buy GE's BioPharma business. The deal will raise $21.4 billion for GE, which is racing to fix its debt-riddled balance sheet by selling off major pieces of its empire.

The BioPharma unit, part of GE Life Sciences, makes instruments and software that support the research and development of pharmaceuticals. It brought in $3 billion in revenue last year.

GE promised to use the proceeds to cut down mountain of debt. Crucially, GE said that Danaher agreed to assume the pension obligations as part of the deal.

GE shares spiked 13%, on track for its best day since March 2009. Danaher's stock rallied 7%.

"Today's transaction is a pivotal milestone," Culp said in a statement. "It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet."

Culp was hired to turn around slumping GE last fall, becoming the conglomerate's first ever outsider CEO. Culp secured a handsome pay package that would award him more than $310 million in total compensation if he can lift GE shares to about $31 by the end of September 2022.

A person familiar with the matter told CNN Business that there is "absolutely no conflict" here because it's a good deal and speeds up GE's deleveraging plan. The source said that all GE transactions, including this one, are vetted by outside advisors and the board.

As of March 2015, Culp owned 2.4 million shares of Danaher. It's unclear how much he owns now. A GE spokeswoman said Culp's personal holdings are not public.

Culp became CEO of Danaher in 2001 at the age of 37. During his 14-year tenure, Danaher's revenue and market cap quintupled as Culp remade the company from a tired manufacturer to a modern company with strong health sciences and tech businesses.

The BioPharma unit is just the latest business that GE is unloading. The company is also spinning off the remaining healthcare business, selling GE Capital assets and retreating from the oil-and-gas giant Baker Hughes. GE has been trying to find a buyer for the iconic light bulb unit.

And on Monday GE announced the completion of the spinoff of GE Transportation, the century-old railroad division. GE, an early pioneer of the locomotive industry, agreed to merge the rail business with Wabtec. GE received $2.9 billion in cash as well as a 24.9% stake in Wabtec. GE shareholders will also receive Wabtec shares.

Earlier this month GE also announced plans to shrink the scale of its once-ambitious plan for a headquarters along the Boston waterfront.