GE to sell appliances business to Haier for $5.4 billion

General Electric Co (GE.N) said on Friday it has agreed to sell its appliances business to Qingdao Haier Co Ltd (600690.SS) for $5.4 billion.

Haier has been looking to gain more market share in the Americas.

GE Appliances is expected to give it just that.

GE said it expects the deal to generate an after-tax gain of about 20 cents per share upon closing, which will be offset by restructuring in 2016.

GE Appliances employs about 12,000, including about 6,000 at its 900-acre Louisville campus, which manufactures household products including dishwashers, refrigerators and hot water heaters.

Speaking of approval, this isn’t the first time GE has tried to sell off their appliances division. It also highlights Haier’s global ambitions, since the acquisition would help the company expand in the US, one of the the markets it’s trying to focus on besides Europe and Japan. The business trails only Whirlpool Corp (WHR.N) in the US white goods market and reported revenue of $5.9 billion past year. The company hired a slate of engineers to oversee the overhaul.

GE recently terminated an agreement to sell the unit to Sweden-based AB Electrolux.

By snapping up GE Appliances, Haier is able to penetrate an entire continent. Let me repeat: “We get to keep the headquarters and the employees”. That means the corporate office jobs in Louisville may have been greatly reduced.

GE is also selling most of its finance arm, or about $200 billion in assets. He also said that, it is also likely that they will have more synergy as Haier is developing smart appliances.

According to The Wall Street Journal, the Haier deal represents a significant premium in the marketplace.

GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive.

This morning, General Electric announced that it has entered into a definitive agreement with Qingdao Haier Co.

Haier Group owns a 41 percent stake in Qingdao Haier. GE was previously in negotiations with Electrolux, but the transaction fell under scrutiny from federal regulators who filed an antitrust lawsuit over the proposal. She said appliance sales are rising “as the residential housing market picks up speed”.

As for renegotiating the labor contract, Crittenden said he did not think it would be an issue. GE could not be immediately reached for comment outside regular business hours.

“We have to increase our commitment to workforce development”, he said.

Metro Councilwoman Barbara Shanklin is a GE Appliances retiree, and Appliance Park is in her district.

“It means a lot”, she said.

The deal, which will be funded through the company’s capital and loans, will need anti-trust approval from authorities in U.S., Mexico, Canada and Colombia.