September 8, 2014 – “This transaction is consistent with our strategy to be the world’s best infrastructure and technology company […] We are creating a new type of industrial company…” said GE’s chair and CEO Jeff Immelt (photo 1) of the company’s decision to sell its Appliances business to Electrolux for $3.3 billion.
GE says it has taken significant steps this year to reshape and focus its portfolio. In June, GE’s offer for Alstom’s Power and Grid businesses was accepted by the Alstom board and recommended by the French government. Power & Water is one of GE’s higher-growth/margin industrial segments. In August, GE completed the IPO of its North American Retail Finance business (Synchrony Financial) as a first step toward its exit from that business.
The 2014 portfolio activity continues the company’s “longer-term redeployment of capital from non-core assets like media, plastics and insurance to higher-growth, higher-margin businesses in Oil & Gas, Power, Aviation and Healthcare”. GE aims to achieve 75% of earnings from its Industrial business by 2016 and, along with today’s announcement, highlight GE’s focus on core infrastructure businesses supported by a valuable specialty finance business.
“GE Appliances is a well-run operation with strong capabilities in key areas such as R&D, engineering, supply chain and customer service,” said Keith McLoughlin, president and CEO of Electrolux (photo 2). As part of the transaction—which is expected to close in 2015—Electrolux may continue to use the GE Appliances brand.