Electrolux To Buy GE Appliances For US$3.3 Billion
The acquisition is the largest ever for the Swedish Company. Electrolux, ranked as the world’s second biggest home appliance maker saw their shares rise 7 per cent on the announcement.
Last month US Company GE confirmed 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”.
He said GE’s product line complements his company’s iconic Frigidaire and Electrolux brands, and will enhance it in several global markets.
He claimed that the deal also “strengthens their commitment to the appliance business and … provides Electrolux with the scale and opportunity to accelerate our investments in innovation and global growth.”
A buyout by Electrolux will give the Swedish manufacturer a leading share of the Australian market ahead of further expansion by Samsung and LG who also ran a ruler over the GE business.
In the USA GE is roughly tied with the Whirlpool brand for first place, with each controlling just over 15 percent of the market, while Electrolux’s largest U.S. brand, Frigidaire, trails Kenmore, LG, Samsung and Maytag for seventh place.
Original contenders to buy the business included LG Electronics, Samsung, Turkish appliance maker Arcelik who sells the Beko range in Australia.
At one stage Haier became the leading acquisition candidate, the Chinese manufacturer eventually backed out due to weakening U.S. market conditions and difficulty in securing financing claims TWICE.