Washington, DC, United States (4E) – According to recent reports being circulated, General Electric’s household appliances unit is set to be sold off to Sweden’s Electrolux AB and Quirky Inc for a record price of USD2 billion. Included in the sale would be iconic brands GE Monogram, GE Café and Hotpoint.
The move is designed to have the corporation in its industrial operations and move away from retail businesses as directed by current Chief Executive Officer Jeffrey Immelt.
While Electrolux would expand its businesses with the acquisition, Quirky is a consumer development company in its start up phase. The company would form partnerships with private equity firms to acquire a majority share of the company being sold.
When sought for comment, GE spokesperson Seth Martin declined to make any comment on the matter.
Other players in the consumer appliances market have also shown interest. These include South Korean firms LG Electronics Inc and Samsung Electronics Co who have been seeking ways to expand its presence in the lucrative US market. Interest was also indicated by Mexico’s Controladora MAbe SA, GE’s partner in Mexico and China’s Haier Electronics Group.
One of the major hurdles to the deal is the current deal with Whirlpool Corp. The deal created the largest appliance partnership in the United States and may face antitrust review by government authorities.
Previously, GE tried to sell of its home appliances unit back in 2008. It had engaged the services of Goldman Sachs at the time to help in the due diligence of possible buyers and the actual sale. Unfortunately, the recession just hit the country and the plan was eventually scrapped due to the lack of buyers.
Under the leadership of CEO Immelt, plans were laid out to sell off or divest nearly USD4 billion worth of non-core assets of the company. The focus of GE nowadays is in its industrial business industry, where it recently purchased the energy assets of Alstom SA of France. The said acquisition had a price tag of USD17 billion, the biggest in the firm’s financial history.
As for GE Appliances CEO Chip Blankenship, he confirmed that the sale was part of a general plan entitled “A Blueprint for Bridging the Industrial Skills Gap” which was drafted last June. The focus, according to an interview, was the need to address key economic issues would help the business grow. One of the key areas for improvement is the current shortage of skilled workers for the manufacturing industry, which is one of the main hindrances to further growth of companies and the industry as a whole.
While Blankenship did not directly address the sale issue, he did say that the focus must be on the job at hand. He said that he has been promoting the need for support in areas to become and remain competitive through workforce development. He added he has been telling his employees at GE Appliances the very same thing.