GEâ€™s Appliance Unit to be Acquired by Electrolux
Published By : 09 Sep 2014 | Published By : QYRESEARCH
General Electric Co’s 100 year old appliances unit will soon be bought by Electrolux AB for $3.3 billion in cash and the Swedish company Electrolux AB will be at par with US’s market leader, Whirlpool Corp. This being Electrolux’s biggest purchases will bring together brands like Zanussi, Hotpoint and Frigidaire to create a company which will generate an annual revenue worth $22.5 billion. Acquisition of this US business will enhance the earnings in the very first year itself and this will significantly enhance the share value which will be considered to be the highest since the year 1989.
According to an analyst at Kepler Cheuvreux, the appliances market in North America will mostly be dominated by Whirlpool and Electrolux, with each company controlling almost 40% of the industry in this region. This business deal will act as a major boost to GE’s long term plan on focusing on lucrative industrial units like oil, gas, and aviation.
Whirlpool had acquired a controlling stake in Indesit Co., an Italian appliance manufacturer for $981 million. After two months, Electrolux declared its purchase plans. Last year, the combined revenue of Indesit and Whirlpool was $22.3 billion.
In 2011, Electrolux had become the biggest appliance supplier in Argentina and Chile after it acquired Compania Tecno Industrial SA for approximately $690 million.
The GE unit employs almost 12000 people and it had reported sales worth $5.7 billion in the year 2013. In the same year, Electrolux had generated sales worth $4.5 billion. The headquarters of Electrolux is situated in Charlotte in North Carolina.