Report: Electrolux close to deal to buy GE’s appliance business for $2.5B
09/04/2014 12:38 PM
09/04/2014 12:40 PM
Electrolux, the Swedish appliance maker that has its North American headquarters in Charlotte, is close to sealing a $2.5 billion deal to buy General Electric Co.’s appliance business, Reuters reported Thursday.
The news agency, citing people familiar with the matter, said the deal could be announced as early as next week. Such a deal could vault Electrolux over Whirlpool to become the globe’s No. 1 appliance maker.
Electrolux confirmed last month it was in talks to acquire GE’s appliance business, but it said then that no deal had been reached. The company declined further comment Thursday.
Gov. Pat McCrory, in Charlotte for a lunchtime address to North Carolina community college trustees, said he wasn’t sure what such a deal would mean for Electrolux’s Charlotte-based headquarters. He added, however, that North Carolina would welcome further growth of the company’s operations.
“We’d love to see an expansion here, but we don’t know the dynamics, especially considering GE appliances are currently built in Louisville,” he said.
GE’s Louisville, Ky.-based appliance division employs 6,000 people at what the company calls Appliance Park; 3,700 of them are hourly manufacturing employees.
Stockholm-based Electrolux makes a range of appliances, under brands such as Frigidaire, Kelvinator and Electrolux. The company employs about 900 people in Charlotte; late last year it announced plans to double the size of its workforce here and build a 375,000-square-foot building adjacent to its headquarters in University Research Park.
Some of GE’s Louisville-based administrative jobs could conceivably shift to Charlotte under a merger, said Tim Somheil, editor of ApplianceMagazine.com, a trade publication that tracks developments in the industry.
“That would be a logical step if one of their goals is to consolidate and make the operations more efficient in the United States,” he said.
Electrolux is the world’s second-largest appliance maker.
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.
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. Staff writers John Arwood and Eric Frazier contributed.
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