GE brings a well-known appliance business that includes washers, dryers, air conditioners, dishwashers, refrigerators, freezers and other appliances to the table. It’s well-known that General Electric Company (NYSE:GE) has had the division up for sale for some time after Chief Executive Officer Jefrrey Immelt made it clear that he would prefer to focus on industrial operations. Nevertheless, the Louisville, Kentucky-based division is nothing short of iconic introducing the electric toaster in 1905 and the washing machine in 1930.
As early as next week?
It now appears that the deal will come through at or above $2.5 billion as GE once again approached Electrolux.
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After Whirlpool Corporation (NYSE:WHR), Electrolux AB (ADR) (OTCMKTS:ELUXY) is the world’s second largest appliance maker in the world and a sale would allow the Swedish conglomerate major inroads into the United States as it struggles with sales in Europe whose economy just can’t seem to recover in a timely manner and may not for some time. Quirky Inc., a consumer-product development company has also shown interest along with Electrolux in the division.
With the anticipation of a deal to be announced as early next week, Electrolux is up nearly 5% on the day, and now has a market capitalization of over $8 billion. GE is also trading up though only marginally. Neither company has commented as details clearly need to be finalized.
GE sell’s its appliances under the Monogram, GE Cafe and Hotpoint brands and generated about $8.3 billion in revenue last year.
North America is critical for Electrolux
The Home Depot, Inc. (NYSE:HD) recently smashed expectations for its second quarter based on appliance sales and it looks like Electrolux is willing to up the ante for GE in order to get in on this move and rising home prices.
Electrolux AB (ADR) (OTCMKTS:ELUXY), which sells under brands such as Frigidaire, AEG and Zanussi as well as its own name, would become a major player behind Whirlpool if the deal was to go through.
In 2013, western Europe accounted for 28% of group sales for Electrolux, while North America represented 32% Organic growth in North America was 7% while in Europe it was 0.4%. Sales in India and Brazil for the company have all but dried up in recent years.