Haier to buy GE’s appliances business for $5.4B

Haier said the transaction includes GE Appliances’ 48.4% stake in Mabe, a Mexican appliance company that has a joint venture and a sourcing relationship with the business.

While Louisville, Kentucky, will remain the appliances headquarters, GE hopes the decision will help it globally.

As part of the transaction, GE has entered into a long-term agreement with Haier to continue use of the GE Appliances brand.

In December previous year, GE walked away from a $3.3 billion agreement to sell its appliances business to Sweden’s Electrolux AB (ELUXb.ST), after months of opposition from USA antitrust regulators.

The deal announced Friday will have Haier acquire the assets of GE Appliances – including sales and supply networks, service facilities and nine US plants – through subsidiary Qingdao Haier.

The latest deal, expected to close mid-year, hands Haier a $5.7 billion operation that’s roughly tied for first place with the Whirlpool brand in the USA, where GE does about 90 percent of its business.

Ultimately, this sale reflects positively on GE’s management, in its ability to quickly react to a disappointing development and make a deal that’s even more valuable for shareholders. It has two quoted subsidiaries, Haier Electronics in Hong Kong and Qingdao Haier in Shanghai – which is the vehicle for the GE acquisition.

“We are proud of Appliances’ history and performance”, Immelt continued.

Prior to Friday’s announcement, the company was already the largest home appliance manufacturer in the world. Ltd. agreed to pay $5.4 billion for GE Appliances. Besides the appliance business, he’s selling the bulk of GE’s lending arm, while expanding divisions making products such as gas turbines, oilfield equipment and jet engines.

The two companies have also announced a long term strategic partnership to explore cooperation in the areas of industrial internet, healthcare, and advanced manufacturing.

A win for both sidesBuying GE Appliances gives Haier greater access to the US market and allows it to expand the brand’s presence within mainland China.

It marks the third major overseas acquisition by Chinese companies this week. Both companies will work together on opportunities to develop and grow affordable consumer health initiatives in China.

Since then, Haier has re-launched the $500 million business as a mass-premium lifestyle line, and could ostensibly leverage GE’s considerable prowess in laundry, bottom-mount refrigeration, logistics, R&D and the contract channel. They said the sale is subject to regulatory and anti-trust approvals in relevant countries.