Sweden’s Electrolux, on Monday, announced that it is buying the appliances business of General Electric (GE) for $3.3 billion (`19,872 crore) with a view to boost its presence in the North American market.
The acquisition is the largest ever for Stockholm-based Electrolux, ranked as the world’s second biggest home appliance maker after US-rival Whirlpool.
Electrolux CEO Keith McLoughlin said the move, which needs regulatory approval and is expected to be completed in 2015, “takes our company to a new level in terms of global reach and market coverage.”
“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 US,” GE chief executive Jeff Immelt said in a joint statement.
GE confirmed last month it was in talks to sell its appliances division — which made the first electric toaster more than 100 years ago — as part of its effort to focus on more complex and profitable industrial equipment.
Electrolux has more than 60,000 employees, including 10,000 in North America.
The transaction is expected to generate annual cost savings of around $300 million.
GE Appliances division, which has 12,000 workers at nine factories, earned $381 million last year. On the other hand Electrolux posted a second-quarter net loss of $13.5 million but said demand in Europe and the US was picking up.