Electrolux in talks to buy GE’s appliance business
08/14/2014 2:31 PM
08/14/2014 4:22 PM
Electrolux, which has its North American headquarters in Charlotte, said Thursday that it’s in talks to acquire General Electric’s appliance business.
“No agreement has been reached, and there can be no assurances that an agreement will be reached,” the Swedish company said in a brief statement announcing the talks.
Stockholm-based Electrolux makes a range of appliances, under brands such as Frigidaire, Kelvinator and Electrolux. The company employs about 900 people in Charlotte, and recently announced plans to double the size of its workforce here and build a 375,000-square-foot building adjacent to its headquarters in the University City area.
Electrolux is the world’s second-largest appliance maker, behind Whirlpool. But Electrolux apparently isn’t alone in its pursuit of GE’s appliance division.
“GE is evaluating a wide range of strategic options for our appliances business, including discussions with Electrolux and other interested parties,” said GE spokesman Seth Martin.
The Wall Street Journal reported GE has also been approached by other rival appliance makers, including Samsung and LG Electronics.
GE’s appliance and lighting division had $8.3 billion worth of sales last year, mostly heavy appliances such as refrigerators and stoves. That accounted for just under 6 percent of GE’s total revenue.
The division posted a $381 million profit, for a 4.6 percent profit margin, demonstrating the slim margins in selling consumer appliances.
Electrolux saw total sales of $16.7 billion last year, meaning that acquiring GE’s appliance and lighting division could increase Electrolux’s revenue by 50 percent. That would be more than enough to vault Electrolux into the No. 1 appliance maker spot worldwide, surpassing Whirlpool’s $18.8 billion in annual sales.
GE manufactures appliances under the names GE Monogram, GE Cafe, GE Profile and Hotpoint, and sells most of its appliances in the U.S. Electrolux’s largest market for major appliances is Europe, which has been seeing slow growth as the continent’s economy continues to struggle. Electrolux has increasingly turned to North America, where sales have been increasing more rapidly, to fuel growth.
GE’s appliance division is based in Louisville, Ky., at what GE calls Appliance Park. According to the company, 6,000 people work there, 3,700 of whom are hourly manufacturing employees.
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