Jeffrey R. Immelt, the chief executive of G.E., is focusing the company on its core industrial businesses.Credit Mark Wilson/Getty Images
LONDON – General Electric said on Monday that it had agreed to sell its appliance business for $3.3 billion in cash to Electrolux of Sweden, parting ways with the century-old division that gave birth to the washer-dryer and the toaster oven.
The acquisition is expected to significantly bolster Electrolux’s growing business in North America and marks the latest in continuing efforts by Jeffrey R. Immelt, the chairman and chief executive of G.E., to focus the conglomerate on its core industrial businesses.
As part of the deal, Electrolux would continue to use the G.E. Appliances brand name. The companies confirmed in August that they were in talks.
G.E. had first tried to sell the division six years ago, when Electrolux and the Asian appliance manufacturers Samsung and LG were among companies taking part in negotiations. But those talks fell apart in the onset of the financial crisis.
The deal, which is Electrolux’s biggest ever, gives the company “the scale and opportunity to accelerate our investments in innovation and global growth,” Keith McLoughlin, the president and chief executive of Electrolux, said in a news release.
Shares of Electrolux rose 8.2 percent to 202.70 Swedish kronor in trading in Stockholm on Monday morning.
Electrolux, already one of the world’s biggest manufacturers of home appliances and industrial equipment, posted sales of 109 billion Swedish kronor, or about $15.3 billion, last year. G.E.’s appliance division generated $5.7 billion in revenue in the same period.
The Swedish company draws nearly half of its sales from the Americas, with kitchen appliances making up 60 percent of sales. The combined Electrolux-G.E. Appliances would have about 73,000 employees worldwide.
The deal is subject to regulatory approval and is expected to close in 2015. The transaction carries a $175 million termination fee if Electrolux is unable to win regulatory approval.
The company has sold or spun off several of its noncore businesses in recent years, including NBCUniversal, its television and media empire, to the American cable operator Comcast, for about $30 billion in 2009.
In July, G.E. spun off its North American retail finance arm, now known as Synchrony Financial, in an initial public stock offering.
The sale to Electrolux “is consistent with our strategy to be the world’s best infrastructure and technology company,” Mr. Immelt said in a news release.
The appliance division dates to G.E.’s early days and is the most direct connection that most consumers have with G.E.
It introduced its first electric toaster in 1905 and the first electric range, the Hotpoint, in 1910. Its first electric washing machine for homes was introduced in 1930.
But the unit has been dwarfed by other G.E. business lines in recent years. Appliances and lighting accounted for only about 6 percent of the company’s $146 billion in revenue in 2013.
G.E. Appliances, based in Louisville, Ky., derives more than 90 percent of its revenue from North America. Its products include refrigerators, dishwashers, air-conditioners, washing machines, dryers and water heaters. The division employs about 12,000 people.
The transaction would also include a 48.4 percent stake in Mabe, a Mexican appliance maker. For nearly 30 years, G.E. has operated a joint venture with Mabe to develop and manufacture appliances.
Electrolux said it expected to generate annual cost savings of about $300 million if the transaction goes through.
G.E. was advised by Goldman Sachs and the law firm Sidley Austin, while Electrolux was advised by Deutsche Bank and Skandinaviska Enskilda Banken and the law firm Davis Polk & Wardwell.
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