LONDON – General Electric said on Monday that it had agreed to sell its appliances 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 second time was the charm for G.E., which first tried to sell the division six years ago. Back then, Electrolux and the Asian appliance manufacturers Samsung and LG were among the companies in negotiations with the American industrial giant, but those talks fell apart in the onset of the financial crisis.
The acquisition is expected to significantly bolster Electrolux’s business and, as part of the deal, Electrolux has reached a long-term agreement to continue to use the G.E. Appliances brand name. The companies confirmed in August that they were in talks.
Elextrolux, 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 appliances 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, 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.
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 sale marks the latest development in the continuing efforts of Jeffrey R. Immelt, chairman and chief executive of G.E., to reshape the conglomerate. Since the financial crisis in the fall of 2008, Mr. Immelt has sought to return the company’s focus to its core industrial businesses.
“This transaction is consistent with our strategy to be the world’s best infrastructure and technology company,” Mr. Immelt said in a news release.
The company has sold or spun off several of those non-core businesses in recent years, including agreeing to sell NBCUniversal, its television and media empire, to Comcast, the largest cable operator in the United States, 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 appliance division dates back to General Electric’s early days and is the most direct connection 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 business has become less important to G.E. in recent years, as it was dwarfed by other business lines. The appliance and lighting businesses accounted for only about 6 percent of the company’s $146 billion in revenue in 2013.
Based in Louisville, Ky., G.E. Appliances generates more than 90 percent of its revenue in North America. Its products include refrigerators, dishwashers, air conditioners, washing machines, dryers and water heaters. The division employs about 12,000 people.
The transaction also includes a 48.4 percent stake in Mabe, the Mexican appliance maker. G.E. has operated a joint venture with Mabe in Mexico for nearly 30 years to develop and manufacture appliances.
Electrolux said that it expects to generate annual cost savings of about $300 million following the transaction.
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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