- Category: Health
- Created: Thursday, 14 August 2014 14:55
- Written by Yahoo News
By Anna Ringstrom and Soyoung Kim
STOCKHOLM/NEW YORK (Reuters) - World number two home appliances maker Electrolux said it was in talks to buy General Electric's household appliances business, seeking to increase its foothold in North America which is growing faster than its other main markets in Europe.
GE confirmed it is evaluating strategic options for the home appliances business, including discussions with the Swedish group and other interested parties.
New York start-up Quirky, which has partnered with GE to market smart-home products, is another suitor for the GE business and is working with an investment bank to put together a bid, one person familiar with the matter said.
"AB Electrolux today confirmed that it is in discussions regarding a possible acquisition of the appliances business of GE. No agreement has been reached," Electrolux, a smaller rival to Whirlpool , said in a statement on Thursday.
GE's home appliances business, which sells products under the GE Monogram, GE Cafe and Hotpoint brands, could be worth between $2 billion and $2.5 billion, according to people familiar with the matter, who asked not to be named because they were not authorized to speak with the media.
The U.S. diversified conglomerate is trying to sell its home appliances unit as Chief Executive Jeffrey Immelt seeks to allocate resources to higher-growth businesses.
The unit is almost exclusively focused on the U.S. market and lacks a global scale, and GE believes it could be more valuable when being part of a global appliances group such as Electrolux, said one person familiar with the divestiture plan.
Electrolux, which sells under brands such as Frigidaire, AEG and Zanussi as well as its own name, declined to comment further. Quirky did not immediately respond to requests for comment.
After suffering from weak economies and currencies in Europe and Brazil that cost cuts and improvement in the North American market could not offset, Electrolux has seen European demand start to recover this year albeit still lagging North America.
In 2013, western Europe accounted for 28 percent of group sales while North America represented 32 percent. Organic growth in North America was 7 percent while in Europe it was 0.4 percent.
GE's appliances and lighting division had $8.3 billion in revenues in 2013 out of total industrial revenues of 103.6 billion.
(Reporting by Anna Ringstrom and Mia Shanley in Stockholm and Christine Murray and Soyoung Kim in New York; Editing by Erica Billingham and Chizu Nomiyama)