Electrolux Look To Buy GE Appliance Group, LG and Samsung Tipped To Bid
If successful the move would make Electrolux who also sell AEG products in Australia one of the biggest non-Asian appliance groups in the world.
Insiders claim that GE has been shopping its white-goods operation around several appliance groups with at least one major Chinese brand expressing interest in the US operation.
Other potential bidders include LG Electronics and Samsung Electronics as well as Arcelik who sell the Beko brand of appliances in Australia.
Electrolux, with $15.9 billion in 2013 revenue, said in a statement overnight that it has held discussions about a possible acquisition, but “no agreement has been reached and there can be no assurances that an agreement will be reached.”
Electrolux, whose home appliances include Frigidaire and AEG, is nearing the end of a restructuring designed to reduce overhead costs and revamp its manufacturing footprint.
In recent years, it has been dogged by malaise in European markets, prompting Mr. McLoughlin to pursue growth in Asia Pacific and the USA.
Electrolux has a history of expanding through acquisitions. It made a flurry of acquisitions throughout the 1960s, acquired Frigidaire in 1986, and AEG’s household division in 1994.
Another contender to buy the group according to Twice is Quirky, a crowd funded New York start-up that openly solicits product concepts and works with various manufacturers and retailers to bring them quickly to market.
According to Twice GE took an equity position in Quirky, and is particularly interested in the company’s home-automation spinoff Wink, which has developed an open platform and such connected products as Arose, a room A/C that self-adjusts to usage patterns and can be controlled remotely via mobile device.
According to a Bloomberg report, Quirky would lead a group of private-equity investors in acquiring a majority stake in GE Appliance while GE would retain a minority position in the business.
According to the Stevenson Company, GE is roughly tied with Whirlpool brand for first place, with each controlling just over 15 percent of the US market, while Electrolux’s largest U.S. brand, Frigidaire, trails Kenmore, LG, Samsung and Maytag for seventh place.
The Wall Street Journal said that Established brands like LG and Samsung would be interested in the GE appliance business in an effort to expand their US operations.
GE executives believe that selling the appliance business for the right price is “consistent with strategic positioning,” this person said. But GE isn’t rushing to complete the sale by a certain date, such as year-end, this person added. “There’s not a dire need for cash.”
GE put the appliance business up for sale in 2008 but couldn’t find buyers or the right conditions for a spinoff amid the global recession. After the sale plan fizzled, GE committed almost $1 billion to reinvigorating its appliance product line.
GE’s appliance business has been focused on the U.S. market, and executives believe that a global footprint could be required to keep pace in the competitive appliance industry, one reason the company is strongly considering a sale, another person familiar with the matter said. But a sale wouldn’t necessarily mean the end of GE-branded dishwashers and refrigerators. There is a strong likelihood that the GE brand would live on after any deal, via a licensing agreement with a buyer, this person said.