Beijing: Haier Group said it would buy General Electric Company’s appliance business for $5.4 billion, the Chinese company’s latest attempt to boost its presence in the US market.
Haier, which made an abortive attempt in 2008 to buy the business, has a negligible presence in the US white goods market, dominated by Whirlpool, Sweden’s Electrolux AB and GE.
The news comes weeks after GE walked away from a deal to sell the business to Electrolux for $3.3bn, following months of opposition from US antitrust regulators.
GE said the deal values the appliance business at 10 times last 12 months earnings before interest, taxes, depreciation, and amortisation.
The deal will give Haier ownership of a century-old business that makes refrigerators, freezers, clothes washers and dryers under brands such as Monogram, Café, Profile and Artistry. The business reported revenue of $5.9bn last year.
Haier has been mostly present in the highly competitive, so-called “value segment” of the US market and analysts expressed concern about the impact its bigger presence would have on the pricing dynamics.
Haier will continue to use the GE Appliances brand and retain the business’s headquarters in Louisville, Kentucky and its current management team, the companies said.
The deal is another step in GE’s push to prune its non-core assets as it transforms itself into what it calls a digital industrial company – hiring more people to write complex software codes to efficiently run its jet engines, power turbines and medical equipment. GE is also selling most of its finance arm, or about $200bn in assets. It has closed deals on about $100bn so far and announced sales of another $50bn.
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