GE Agrees to Sell Appliances Business to Haier
GE announced today it has signed a definitive agreement to sell its Appliances business to Qingdao Haier Co., Ltd. for USD 5.4 billion. The transaction has been approved by the board of directors of GE and of Haier, and remains subject to customary closing conditions, including Haier shareholder approval, and regulatory approvals. The divestment of the Appliances business, a unit that claims to be the fourth largest U.S. injection molder, 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.”
The transaction values GE Appliances at 10 times the last 12 months of earnings before interest, taxes, depreciation, and amortization. The sale will generate an after-tax gain of approximately USD 0.20 per share at closing. 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.
“Haier has a good track record of acquisitions and of managing brands", Immelt continued. "They have a stated focus to grow in the U.S., build their manufacturing presence here, and to invest further in the business. Innovation, new product introduction and brand management are fundamental to their overall strategy. GE Appliances provides Haier with great products, state-of-the-art manufacturing facilities and a talented team. In addition, we see the opportunity to work together to build the GE brand in China.”
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