Electrolux’s planned purchase of GE Appliances would help the company better compete with large global rivals, the CEO of the Swedish appliance maker said Thursday.
Speaking in Charlotte, Electrolux CEO Keith McLoughlin said the $3.3 billion acquisition would, among other things, help Electrolux cut costs and provide consumers with innovative products.
“To get all of that done, you need scale, you need leverage,” McLoughlin said at an event for investors and analysts at the company’s North American headquarters in the University City area.
Electrolux moved its North American headquarters from Augusta, Ga., to Charlotte in 2010, lured partially by a $27 million state and local incentives package. In September, Electrolux announced a deal to acquire the appliance business of General Electric.
Sign Up and Save
Get six months of free digital access to The Charlotte Observer
McLoughlin has said Charlotte would remain the company’s North American headquarters. GE’s appliance division is based in Louisville, Ky., where the company employs some 6,000 workers.
Electrolux employs about 925 people in Charlotte and has said it expects to increase that number to 1,600 by the end of 2017.
The GE deal, which awaits regulatory approval, comes as Electrolux seeks to gain market share over rivals such as the U.S.’s Whirlpool Corp. and China’s Haier Electronics Group.
Electrolux is expecting the deal to increase its U.S. returns. GE’s revenue last year was $5.7 billion. The combined company would have $22.5 billion in annual revenue, the companies have said. The combined company is expected to have about 73,000 employees.
McLoughlin said 95 percent of GE’s business comes from the U.S. But he said the deal also “significantly strengthens the firepower” for Electrolux to compete globally by giving it enhanced capabilities in marketing, technology, and research and development, among other things.
Also Thursday, McLoughlin said he expects an improving economy in North America to help increase demand next year for appliances. But he said demand is expected to be flat in Europe and some other global markets.