Haier has reached an agreement to purchase the appliance business of GE for $5.4 billion.
According to GE, the transaction values GE Appliances at 10 times the last 12 months of earnings before interest, taxes, depreciation, and amortization. GE expects to offset the gain with restructuring in 2016. As part of the transaction, GE has entered into a long-term agreement with Haier to continue use of the GE Appliances brand. Louisville will remain the headquarters for GE Appliances. The transaction is targeted to close in mid-2016.
“We are pleased to be selling our appliances business to Haier, which is committed to growing the business globally,” said GE chairman and CEO, Jeff Immelt. “GE Appliances is performing well and there was significant interest from potential buyers, helping drive a good deal which will benefit our investors, customers and employees.”
“Haier and GE share the same vision, and value innovation, customer service, and developing products of the highest quality,” said Zhang Ruimin, chairman and CEO of Haier Group. “Haier and GE will explore opportunities for joint collaboration and, in doing so, establish a type of new alliance with comprehensive strategic cooperation between two world-class enterprises, which reflects our common understanding on opportunities brought by the Internet era.”
The Haier/GE deal comes just weeks after a bid by Electrolux to purchase the GE appliance business collapsed in December. Not long after that deal failed to materialize, Electrolux CEO Keith McLoughlin announced his retirement.
