GE to sell appliances business to China’s Haier

Chinese home appliance giant Haier has agreed to buy the appliances business of US conglomerate GE for 5.4 billion USA dollars, Haier said on Friday. It will keep the appliance division headquarters in Louisville, Kentucky.

GE had been running an auction for the century-old appliance business since it abandoned a $US3.3 billion sale to Sweden’s Electrolux in December. “The amount of employees, the brands – we do not have that situation with Haier”, Freeman said, adding that GE did not expect to encounter any antitrust concerns over the deal.

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GE Appliances makes refrigerators, freezers, clothes washers and dryers across brands such as Monogram, Café, Profile and Artistry. GE is organized around a global exchange of knowledge, the “GE Store”, through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors.

The U.S. Justice Department (DOJ) had filed a lawsuit in July previous year, asking a judge to stop the GE-Electrolux deal, arguing that it would push up the price of appliances by 5 percent.

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

Dana Crittendon, who is president of the union that represents many local workers, said the agreement between GE and Haier was “good news” for the more than 4,000 workers represented by Local 761. Haier is unlikely to face the same antitrust hurdles as Electrolux because of its small presence in the U.S. Shanghai-listed Qingdao Haier, whose shares have been halted since October 19, will continue to be suspended on January 18.

The sale is part of GE chief executive officer Jeffrey Immelt’s efforts to reshape the company around industrial-manufacturing operations. The acquisition will let Haier vault over Panasonic and Procter & Gamble into fifth place.

Prior to Friday’s announcement, the company was already the largest home appliance manufacturer in the world. Both companies will also work together to develop and grow affordable consumer health initiatives in China, according to the statement.

In 2008, before the aborted Electrolux agreement, GE said it would explore options to sell or spin off the appliances business, concerned that it was too heavily tied to the tumultuous USA market. Therefore, the deal, if completed, will be beneficial for both companies.

The two companies said they also agreed to form a strategic partnership to cooperate in areas such as the Internet, healthcare, and advanced manufacturing.