General Electric (GE) has announced that it plans to sell off its consumer appliance unit, with Swedish appliance maker Electrolux and consumer products start-up Quirky named as the two potential buyers.
The move is just another in a line of attempts to make the company more industrial.Chief Executive Jeffrey R. Immelt sold off NBCUniversal for $30 billion in 2009 and retail finance arm Synchrony Financial last month.
It seems that the company has been implementing plans to divest anything that generates less than 10% in margins.
All paths appear to lead to Power & Water, Aviation, and Transportation which earn around 20% in operating margins. It is quite obvious that GE wants to focus on building and servicing large equipment such as aircraft engines, gas-fired turbines, and oil & gas drilling equipment.
Chief Financial Officer Jeff Bornstein revealed that GE plans to divest about $4 billion in non-financial businesses this year.
According to Bloomberg, if this deal goes through, GE could get at least $2 billion from the sale, which is drastically lower than its $8 billion asking price in the attempted 2008 sale.
“GE is evaluating a wide range of strategic options for our appliances business including discussions with Electrolux and other interested parties,” Seth Martin, a GE spokesman, said yesterday.
Various sources claim that Electrolux is in advanced talks with GE for the purchase of its appliance business. Electrolux confirmed its interest in a statement, claiming that there is no guarantee whatsoever that a deal will be reached.
Sweden’s Electrolux is one of the world’s largest manufacturers of home appliances and industrial equipment, with 2013 revenues totaling $15.9 billion.
Five-year old New-York based start-up company Quirky received a $30 million investment from GE to develop smart air-conditioners. The company is on track to reach $100 million this year.