Steel Markets
Electrolux Acquires GE Appliances
Written by Sandy Williams
September 9, 2014
General Electric is selling its GE Appliance business to AB Electrolux of Sweden for $3.3 billion. Electrolux, the parent company of US brands Electrolux and Frigadaire, expects the sale to generate annual cost synergies of approximately $300 million and enhance its position as a global player in home appliances.
“The acquisition, which is our largest ever, strengthens our commitment to the appliance business and also provides Electrolux with the scale and opportunity to accelerate our investments in innovation and global growth,” said Keith McLoughlin, president and CEO of Electrolux.
The acquisition comes with a long term licensing agreement to use the iconic GE Appliance brands.
“GE Appliances is a well-run operation with strong capabilities in key areas such as R&D, engineering, supply chain and customer service, and we look forward to joining forces with their team of talented and competent people,” said McLoughlin.
The combined company sales are expected to total approximately $22.5 billion and be earnings per share accretive from the first year.
GE Appliance currently has 12,000 employees distributed over nine manufacturing facilities and its own distribution and logistics network. The acquisition also includes 48.4 percent share in the Mexican appliance company Mabe in Mexico. Last year GE Appliances had sales of $5.7 billion and EBITDA of $390 million.
Neither GE or Electrolux was able to comment on possible restructuring of the companies due to the recent nature of the announcement.
Sandy Williams
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