“The amount of employees, the brands – we do not have that situation with Haier”, Freeman said, adding that GE did not expect to encounter any antitrust concerns over the deal.
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GE Appliances is to remain with Louisville, Kentucky headquarters said a statement from the company. The business will continue to be operated independently under the direction of a local board with the participation of GE’s current senior management team.
GE Appliances reported Dollars 5.9 billion in 2014 revenue.
GE recently terminated an agreement to sell the unit to Sweden-based AB Electrolux. Furthermore, there are not many synergies for appliances with GE’s other industrial businesses nor do the buyers have much use for GE Capital.
“They’re buying us for our people, our products and our services”, she said.
Haier bought the white goods operations of Japanese company Sanyo in 2011, the first time a Chinese firm has bought major business segments from a large Japanese manufacturer.
“With Haier I think we really will have job security here”. “They want to make where they sell”.
Haier could also gain entree to the ultra-premium market through GE’s luxury Monogram badge, as the deal includes long-term GE Appliance brand access. “There will be no closures of facilities or loss of jobs because of this transaction”, it said.
The appointment of new Chief Executive Jonas Samuelson, who replaces Mr. McLoughlin at Electrolux from next month, could help the company focus on profitability, said Johan Eliason, analyst at Kepler Cheuvreux.
As for renegotiating the labor contract, Crittenden said he did not think it would be an issue. The US company has in recent years refocused on its home market, bringing production back onshore to the point that 80% of its appliances are made in the US.
Mayor Fischer, too, was upbeat about the news. GE and Haier will also jointly work on creating affordable consumer health initiatives in China, according to a statement.
The deal with Haier is unlikely to draw intense antitrust scrutiny, according to some antitrust experts, but may get a hard look from the Committee on Foreign Investment in the United States (CFIUS).
Qingdao Haier of China will acquire GE Appliances – which is its appliances division – for $5.4 billion in cash, including the company’s 48.4% stake on Mabe, a Mexican appliances company.
GE shares were down about 1.25 percent in early morning trading.
Currently, Whirlpool’s stock trades at 7.6 times EBITDA, Electrolux at 6.6 times, and Haier’s appliances subsidiary trades at 7.5 times.
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The deal is expected to close in the next six months.
