A G.E. worker performing tests on a refrigerator at a company plant in Louisville, Ky.Credit Angela Shoemaker for The New York Times
Updated, 4:08 p.m. | General Electric is holding discussions about the sale of its appliances business, one of the conglomerate’s oldest businesses.
The Swedish appliance maker Electrolux said on Thursday that is was in talks over an acquisition, which would significantly bolster Electrolux’s business. About half of Electrolux’s sales are in the United States, Brazil and the Americas.
Quirky, a New York start-up that develops consumer products, is also interested in the home appliance business, a person briefed on the matter said. Quirky is working with the Blackstone Group on its bid, this person said.
G.E. said in a statement that it “is evaluating a wide range of strategic options for our Appliances business, including discussions with Electrolux and other interested parties.”
Electrolux is one of the world’s largest manufacturers of appliances for the home, including washing machines and refrigerators, as well as larger appliances for the industrial sector. It generated sales of 109 billion Swedish kronor, or about $15.9 billion, last year. By comparison, G.E.’s appliances and lighting division itself generated revenue of $8.3 billion in 2013.
“No agreement has been reached, and there can be no assurances that an agreement will be reached,” Electrolux said in its statement. “Any further announcements will be made in due course.”
Quirky, founded in 2009, uses a crowd-sourced model for rapidly generating ideas for household product ideas. It then winnows the ideas, selects a few to develop and typically does the design, prototyping and arranges for the manufacturing. Products typically get to retail chains like Home Depot in three to four months.
Quirky’s lean, high-speed model of product design and development has attracted the attention of traditional manufacturers — and General Electric most of all.
G.E. has invested $30 million in Quirky. And the two companies are engaged in some joint product development including on a so-called smart air conditioner, whose sensors track household activity and room temperatures and automatically adjusts settings.
Quirky’s revenue is rising rapidly, on track to reach $100 million this year, the company says. It has raised a total of $175 million, mostly from leading venture capital firms, including Andreessen Horowitz and Kleiner Perkins Caufield & Byers.
Bloomberg News earlier reported the talks on General Electric’s appliance business.
The business dates back to General Electric’s early days and is the most direct connection most consumers have with the corporate giant.
G.E. 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.
The appliance business has become less important to G.E. in recent years, particularly as it was dwarfed by the company’s huge finance arm. The appliance and lightning division only accounted for about 6 percent of the company’s $146 billion in revenue in 2013.
But the company’s G.E. Capital arm was hit hard during the financial crisis because of its exposure to commercial loans and risky home loans.
Since then, Jeffrey R. Immelt, G.E.’s chief executive, has sought to return the company’s focus to its core industrial businesses.
The company has sold or spun off several of those noncore 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 June, G.E. agreed to sell its Scandinavian consumer finance business, which operates under the GE Money Bank brand, to the Spanish lender Banco Santander for 700 million euros, or about $935.6 million.
In July, G.E. spun off its North American retail finance arm, now known as Synchrony Financial, in an initial public offering.
Steve Lohr contributed reporting.
This entry passed through the Full-Text RSS service — if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.