Fairfield-based (for now) General Electric announced recently it has signed an agreement to sell its appliances business to Qingdao Haier Co., Ltd. — known as Haier – a China-based international company with U.S. headquarters in Manhattan, for $5.4 billion.
GE Appliances is based in Louisville and will remain there. GE announced on Jan. 13 that it is moving to Boston from Fairfield.
The deal will leave in place the GE name on the appliances.
The transaction has been approved by the board of directors of GE and of Haier, according to a statement from GE, “and remains subject to customary closing conditions, including Haier shareholder approval, and regulatory approvals.”
The deal is targeted to close in mid-2016, GE said.
“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 places the value of GE Appliances at “10 times the last 12 months of earnings before interest, taxes, depreciation and amortization.”
Among the details, according to the statement: “As part of the transaction, GE has entered into a long-term agreement with Haier to continue use of the GE Appliances brand,” GE said. “Louisville will remain the headquarters for GE Appliances.”
“We are proud of Appliances”™ history and performance,” Immelt said. “Haier has a good track record of acquisitions and of managing brands. Haier has 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.”
“Haier and GE share the same vision, and value innovation, customer service, and developing products of the highest quality,” said Haier Group Chairman and CEO Zhang Ruimin. “This transaction underscores Haier”™s devotion to creating a global platform for innovation, which will benefit both Haier and GE Appliances and deliver enhanced value to all stakeholders. Haier is committed to investing in the U.S. In addition, together 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.”
GE and Haier also announced today a long-term strategic partnership to explore cooperation in the areas of industrial Internet, health care and advanced manufacturing. GE will help Haier enhance the efficiency of its manufacturing plants, the statement said, while Haier will help implement GE”™s Predix cloud-based industrial platform.
