After giving hints about the potential acquisition of General Electric Company (NYSE:GE), Electrolux AB (ADR) (OTCMKTS:ELUXY) has finally come up with $2.5 billion potential deal. Both the companies are said to work on the final terms of the agreement, as reported by unknown sources.
Earlier, General Electric Company (NYSE:GE) confirmed that it was negotiating the sale of its home appliance business with Electrolux AB (ADR) (OTCMKTS:ELUXY). Seth Martin, spokesperson for GE said,
“GE is evaluating a wide range of strategic options for our appliances business including discussions with Electrolux and other interested parties.”
Acquiring General Electric Company (NYSE:GE) would be a positive move for Electrolux AB (ADR) (OTCMKTS:ELUXY) considering its expansion plans in North America. Keith McLoughlin, CEO of Electrolux AB (ADR) (OTCMKTS:ELUXY), said last month that the company is planning to expand organically but it will also consider acquisitions if they makes sense to the management. With that perspective, acquiring GE seems appropriate for Electrolux considering that GE’s household appliance business and lighting business generated $8.3 billion in revenues in 2013.
As of now, Electrolux AB (ADR) (OTCMKTS:ELUXY) is the second-largest home appliance maker with brands such as AEG, Frigidire, and Zanussi. The company trails behind Whirlpool Corporation (NYSE:WHR) in terms of home appliance production. Electrolux is paying top dollars for General Electric Company (NYSE:GE) considering that the experts have evaluated it somewhere between $2 billion to $2.5 billion.
According to General Electric Company (NYSE:GE), it could be more valuable when working with a home appliance group with a global presence as n case of Electrolux AB (ADR) (OTCMKTS:ELUXY). This is not the first time when the company has initiated sale of its business considering its step to sell the business in 2008 but the deal couldn’t be materialized because of the financial crisis.
This article has been written by Prakash Pandey.
