Lexington, KY – General Electric announced it's selling its Louisville-based appliance division to Stockholm-based Electrolux for $3.3 billion.
GE is positioning its departure from the consumer appliance industry as a plus as it looks to grow as an infrastructure and technology company. GE states in a release that Electrolux is a good fit for the 5,658 employees the state has reported as working at Louisville’s Appliance Park in 2013.
“Electrolux is the right global business for our customers, consumers and employees. We have greatly strengthened this franchise in the past few years. GE Appliances’ people, valuable home appliances brand, products, distribution, and service capabilities make it a perfect fit with Electrolux and its goal of accelerating growth in the U.S. Like GE Appliances, Electrolux has a nearly 100-year history in home appliances and they share the same principles of quality, innovation and customer value as GE. They are committed to supporting the growth of GE Appliances and value the GE Appliances team and its capabilities,” Jeff Immelt, GE’s chairman and CEO said in a release.
“This is an historic moment and important strategic move for the Electrolux Group, which takes our company to a new level in terms of global reach and market coverage. GE’s premium, high-quality appliances complement our own iconic brands and will enhance our presence in North America,” Keith McLoughlin, president and CEO of Electrolux stated in a release from the Swedish company. “The acquisition, which is our largest ever, strengthens our commitment to the appliance business and also provides Electrolux with the scale and opportunity to accelerate our investments in innovation and global growth.”
GE Appliances generates more than 90 percent of its revenue in North America from products including refrigerators, freezers, cooking products, dishwashers, washers, dryers, air conditioners, water filtration systems and water heaters. Its revenue split by major product category is approximately 35 percent cooking, 25 percent refrigeration, 20 percent laundry, 10 percent dishwashers and 10 percent home comfort (A/C). The company operates its own distribution and logistics network and has nine manufacturing facilities with 12,000 employees.
"GE has been an important part of Louisville's economy and culture for decades,” Louisville Mayor Greg Fischer said in a statement from his office. “Electrolux is a fantastic global brand that we welcome to our city. GE has made unprecedented investments in its people, innovation capabilities, and manufacturing plants in Louisville in the past few years. Along with our partners in state government, we will work with Electrolux leadership to present the advantages and capabilities of our community to grow the combined GE Appliances - Electrolux platform even further."
The acquisition includes a 48.4 percent shareholding in the Mexican appliance company Mabe. For nearly 30 years, GE Appliances has had a joint venture with Mabe in Mexico where Mabe develops and manufactures portions of GE Appliances’ product offering.
In 2013, GE Appliances had sales of $5.7 billion and an EBITDA of $390 million including share of income from Mabe.