General Electric said Monday it has agreed to sell its appliances business to Sweden-based Electrolux for $3.3 billion in cash, ridding GE of one of its last direct connections to consumers as it focuses instead on more profitable industrial businesses.
The deal for GE's Louisville, Ky.-based refrigerator, washing machine and air conditioner business is expected to close in 2015 and Electrolux will be allowed to use the GE Appliances brand as part of a long-term agreement.
GE, which makes jet engines and industrial power systems, for years has weighed selling its appliances unit. The business has a well-known brand but it's less profitable than the conglomerate's, which provide a regular stream of service revenues. Second-quarter profit for appliances and lighting were $102 million, a fraction of the earnings provided by the power and water business or aviation, which each netted more than a $1 billion in profits.
For Electrolux, the deal -- its largest ever -- will significantly expand its presence in North America and make the vacuum cleaner andcompany a more robust competitor against Whirlpool.
"We are creating a new type of industrial company, one with a balanced, competitively positioned portfolio of infrastructure businesses," GE CEO Jeff Immelt said in a statement Monday.
GE has reworked its portfolio in recent years to focus more on its industrial operations while reducing its dependence on its financial arm. In June, GE won approvals to buy most of French engineering giant Alstom. Last month, it completed the initial public offering of its North American retail finance business, Synchrony Financial, the first step in a staged exit from that business. GE has also divested from its former entertainment business,to cable operator Comcast.
Electrolux and GE's FirstBuild microfactory are both, which aims to set standards for the Internet of Things, the concept under which household appliances will communicate over the Internet along with computers and mobile devices.
The acquisition includes a 48.4 percent shareholding in the Mexican appliance company Mabe.