NEW YORK: US conglomerate General Electric (GE) announced Monday it is selling its home appliances business to Swedish white-goods group Electrolux for $3.3 billion.
Under the deal, GE has a long-term agreement with Electrolux -- number two in household appliances in the US after American manufacturer Whirlpool -- to keep using the GE Appliances brand.
Although the boards of directors of both companies have approved the transaction, it is subject to closing conditions and regulatory approvals, and is due to close next year.
"This transaction is consistent with our strategy to be the world's best infrastructure and technology company," GE chairman and CEO Jeff Immelt said in a statement.
"We are creating a new type of industrial company, one with a balanced, competitively positioned portfolio of infrastructure businesses with strong advantages in technology, growth markets, driving customer outcomes and a culture of simplification."
In June, GE's deal to buy the power generation unit of France's Alstom was accepted by that company's board and recommended by the French government.
Last month, GE completed an IPO (initial public offering or stock flotation) of its North American Retail Finance business Synchrony Financial as it prepares to leave that sector.
"GE Appliances is a well-run operation with strong capabilities in key areas such as R&D, engineering, supply chain and customer service," said Electrolux president and CEO Keith McLoughlin.
"We look forward to joining forces with their team of talented and competent people."
The transaction values GE Appliances at 8.0 times the last 12 months of earnings before interest, taxes, depreciation and amortization.
The sale is expected to generate about $0.05-$0.07 per share at closing in after-tax gains.
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