STOCKHOLM (AP) – Sweden’s Electrolux is buying the appliances business of General Electric for $3.3 billion, boosting its presence on the North American market, the companies said Monday.
The acquisition is the largest ever for Stockholm-based Electrolux, ranked as the world’s second biggest home appliance maker after US rival Whirlpool.
GE confirmed last month it was in talks to sell its appliances division – maker of the first electric toaster more than 100 years ago – as part of its effort to focus on selling more complex and profitable industrial equipment.
Electrolux CEO Keith McLoughlin said the move, which needs regulatory approval and is expected to be completed in 2015, “takes our company to a new level in terms of global reach and market coverage.”
Electrolux plans a rights issue corresponding to about 25 per cent of the purchase after the acquisition is complete.
Headquartered in Louisville, Kentucky, GE Appliances’ products include refrigerators, freezers, cooking products, washers and dryers and air conditioners. The division, which has 12,000 workers at nine factories, earned $381 million on $8.3 billion in sales last year, for a profit margin of 4.6 per cent.
“GE Appliances’ people, valuable home appliances brand, products, distribution, and service capabilities make it a perfect fit with Electrolux and its goal of accelerating growth in the US,” GE Chief Executive Jeff Immelt said in a joint statement from the two companies.
Chip Blankenship, president and CEO of GE Appliances, said at a news conference in Louisville that Electrolux is “a company whose sole focus is being a global leader in appliances” and called the alliance “the right business model to ensure our long-term presence and competitiveness.”
Asked if employees should be worried about their jobs, he said, “What I’m telling employees is that this transaction represents the best opportunity for our successful long-term growth, compared to standing still.” About 6,000 people work at GE’s sprawling Kentucky site.