Haier Power

GE sells appliance division to Haier for $5.6 billion

One of the cornerstones of General Electric’s tradition since the days of co-founder Thomas Edison is no longer under the company’s ownership umbrella. GE sold its century-old Appliances unit to Chinese-based Haier on June 6 for $5.6 billion.

The appliances division of GE represents the household provisions of the company. It includes electric fans pioneered in the 1890s, refrigerators, irons, sewing machines, dishwashers, toasters, stoves, and water heaters, among numerous other familiar household appliances.

The sale has been part of business speculation for at least eight years, including multiple near-deals with companies like Electrolux. The final price is $200 million higher than originally announced, to account for working capital in the business.

There is a distinct marketing philosophy behind the move. GE is in the midst of an image makeover during the last decade, including the introduction of new divisions (GE Digital) and consolidation of more traditional ones (GE Lighting). This megadeal will provide GE an opportunity to proceed with its makeover. It should allow the company to shake the sometimes burdensome retail aspect of consumer-based appliances like those mentioned above. Furthermore, it will likely enable GE to shift focus to, literally, bigger things: industrial manufacturing products such as jet engines, industrial power systems, turbines, and locomotives.

GE Appliances division is based in Louisville, Kentucky, and will remain there under the Haier name. The company has stated it does not anticipate a change in its employment figures.

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