Qingdao, Shandong – Qingdao Haier, a listed arm of white goods company Haier Group, signed an agreement on 15 January 2016 with General Electric to acquire its appliances business at $5.4bn.
The transaction is expected to close in the second quarter of 2016. It will need approval by Qingdao Haier shareholders as well as overseas regulators in possible antitrust inspections, said the company’s statement. A month earlier Electrolux’s proposal to buy GE’s appliances business at $3.3bn fell through following opposition from the US Department of Justice.
GE’s appliances business has $1.9bn unaudited book value as of September 2015, according to Haier’s statement. Haier will continue to use the GE brand for appliances and the business’ headquarters will remain in Louisville, Kentucky.
"We are pleased to be selling our appliances business to Haier and to launch this new partnership. Haier has a stated focus to grow in the US, build its manufacturing presence here, and to invest further in the business,” said GE’s ceo Jeff Immelt. “In addition, we see the opportunity to work together to build the GE brand in China."
Haier claims to be the world’s largest retailer of refrigerators, freezers, wine coolers and laundry machines. With a stagnant domestic market, its revenue over the first nine months of 2015 dropped by 11% to 62.6bn yuan ($9.5bn).
The US large appliances sector has its compound annual growth rate from 2015 to 2020 pegged at 3.3%, said the statement. GE has around 20% of the US appliances market, second only to Whirlpool. US sales accounted for 90% of GE’s $4.7bn appliances revenue during the first three quarters in 2015, almost a third of which came from refrigeration products.