General Electric has today named LG Electronics as a contender to buy its appliance business, which is valued at $4-$8 billion, along with China’s Haier Electronics Group Co Ltd, Mexico’s Controladora Mabe and Turkey’s Arcelik (Beko in the UK).
Major Asian appliance makers have been cited as likely suitors since GE, the second-largest U.S. company by market value, said earlier this month it may part with its appliance business which had sales of $7.2 billion last year. This won’t come as a shock to many who watched the scrabble to buy Maytag a couple of years ago.
“The players have become somewhat obvious,” GE Chief Executive Jeff Immelt told reporters while visiting South Korea. “It is Haier in China, it is LG in Korea, it’s Mabe in Mexico, it’s Arcelik (Beko) in Turkey.”
Immelt flew to Beijing, where he mentioned another possible contender — Sweden’s Electrolux, the world’s second-biggest home appliances maker.
“Whether LG or Haier or Electrolux or others participate remains to be seen,” he said.
“The appliance process is still very early on, and much still has to be decided,” Immelt told reporters.
In Seoul, he said LG was “clearly one of the leading candidates”.
“They are a great company. They already have a presence in the U.S. Strategically, there are many things to be admired about a combination of LG and GE Appliances,” he said.
Other makers have had their name put in the frame but, so far, none has admitted any interest.
There are also doubts over whether some of the companies interested can actually raise the capital required to close the sale. No doubt the next few months will be interesting in seeing who enters the fray, stays in or drops out and it may tell more than some of the parties would perhaps wish known.
