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GE agrees to sell appliances business to Electrolux AB for $3.3 billion

GE announced Monday that it has signed a definitive agreement to sell its appliances business to Sweden-based appliance maker Electrolux AB for $3.3 billion. As part of the transaction, GE has entered into a long-term agreement with Electrolux to continue use of the GE Appliances brand. The transaction has been approved by the boards of directors of GE and Electrolux and remains subject to customary closing conditions and regulatory approvals, and it targeted to close in 2015.

"This transaction is consistent with our strategy to be the world's best infrastructure and technology company," said GE chairman and CEO Jeff Immelt. "We are creating a new type of industrial company, one with a balanced, competitively positioned portfolio of infrastructure businesses with strong advantages in technology, growth markets, driving customer outcomes, and a culture of simplification."

According to information supplied by GE, the company has taken significant steps in 2014 to reshape and focus its portfolio. In June, GE's offer for Alstom's power and grid businesses was accepted by the Alstom board and recommended by the French government. Power & Water is one of GE's higher growth and margin industrial segments and it core to the future of GE. In August, GE completed the IPO of its North American Retail Finance business, Synchrony Financial, the first step in a planned, staged exit from that business.

The 2014 portfolio activity continues the company's longer-term redeployment of capital from non-core assets like media, plastics and insurance to higher-growth, high-margin businesses in oil & gas, power, aviation and healthcare, according to GE. These moves support the company's portfolio strategy to achieve 75% of earnings from its Industrial business by 2016, and along with this announcement, highlight GE's focus on core infrastructure businesses supported by a valuable specialty finance business.

GE Appliances, headquartered in Louisville, KY, at the company's 900-acre GE Appliance Park, celebrated 60 years of manufacturing at that location at a huge celebration a year ago. The birthday bash unveiled the $1 billion investment in the Park's nine facilities and the appliances business, and also touted the "revitalization of American manufacturing." GE makes a number of appliance products at the Park including the GeoSpring hybrid water heater, launched in February 2012 as the first new appliance to be built at the Park, and in March 2012, the French-door bottom freezer refrigerator factory opened at the Park.

Commenting further on the sale of GE Appliances to Electrolux, Immelt said, "GE Appliances is a great business and we are proud of the role it has played in GE's history. Electrolux is the right global business for our customers, consumers and employees. Like GE Appliances, Electrolux has a nearly 100-year history in home appliances and they share the same principles of quality, innovation and customer value as GE. They are committed to supporting the growth of GE Appliances and value the GE Appliances team and its capabilities."

Electrolux President and CEO Keith McLoughlin, added, "GE appliances is a well-run operation with strong capabilities in key areas such as R&D, engineering, supply chain and customer service. We look forward to joining forces with their team of talented and competent people."

Haier opens tech center in Indiana

Haier America, a division of the multi-national home appliance and consumer electronics manufacturer Haier Group, recently announced plans to locate its North American Tech Center in Evansville, IN, creating 50 new high-wage jobs by 2015, according to an AP report. New Jersey-based Haier America will initially establish a 30,000-square-foot produce research and development tech center in Evansville, expected to be open by early 2015. The facility will focus on support and development for Haier's North American market including appliances (laundry, kitchen products), home comfort products (ductless and portable air conditioners), and home entertainment products.

Haier America currently employs more than 300 people in the United States, and the company will begin hiring engineers, designers, lab techs, model makers, and other professionals this fall, according to the AP report. Adrian Micu, president and CEO of Haier America, noted that "As the world's number one appliance manufacturer, Haier's strategy has been to establish localized R&D and manufacturing bases that allow the company to support each regions' specific needs."

Micu added that "Evansville has an established infrastructure workforce that we believe will allow us to quickly and successfully build out a tech center focused on designing products tailored for the unique experiences of the U.S. consumer."

The Indiana Economic Development Corporation offered Haier America Trading LLC up to $1,400,000 in conditional (performance based) tax credits and up to $450,000 in training grants based on the company's job creation plans. Initially, Haier plans to hire 50 workers at the Tech Center.

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