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General Electric said on Monday that it had agreed to sell its appliances business for $3.3 billion in cash to Electrolux of Sweden, parting ways with the century-old division that gave birth to the washer-dryer and the toaster oven.
The second time was the charm for GE, which first tried to sell the division six years ago. Back then, Electrolux and the Asian appliance manufacturers Samsung and LG were among the companies in negotiations with the American industrial giant, but those talks fell apart in the onset of the financial crisis.
The acquisition is expected to significantly bolster Electrolux's business and, as part of the deal, Electrolux has reached a long-term agreement to continue to use the GE Appliances brand name. The companies confirmed in August that they were in talks.
Elextrolux, already one of the world's biggest manufacturers of home appliances and industrial equipment, posted sales of 109 billion Swedish kronor, or about $15.3 billion, last year. GE's appliances division generated $5.7 billion in revenue in the same period.
The Swedish company draws nearly half of its sales from the Americas, with kitchen appliances making up 60 percent of sales. The combined Electrolux-GE Appliances would have about 73,000 employees worldwide.
The deal, which is Electrolux's biggest ever, gives the company "the scale and opportunity to accelerate our investments in innovation and global growth," Keith McLoughlin, the president and chief executive of Electrolux, said in a news release.
The deal is subject to regulatory approval and is expected to close in 2015. The transaction carries a $175 million termination fee if Electrolux is unable to win regulatory approval. The sale marks the latest development in the continuing efforts of Jeffrey R Immelt, chairman and chief executive of GE, to reshape the conglomerate. Since the financial crisis in the fall of 2008, Immelt has sought to return the company's focus to its core industrial businesses.
