Monday morning news announcements in the business world confirmed that appliance manufacturer Electrolux has agreed to purchase the GE Appliances division for $3.3 billion. The companies confirmed in August that they were discussing the possibility of an acquisition, which will strengthen the Electrolux appliance product line and, according to the New York Times, give GE the time to focus on its industrial divisions.
Both brands see the deal as an excellent fit. Electrolux, which returned to the Kitchen & Bath Industry Show last year after a hiatus, calls GE Appliances "one of the premier manufacturers of kitchen and laundry products in the U.S." GE, responsible for bringing electric toasters, washing machines, and hermetically sealed refrigerators to the masses in the United States, says Electrolux is "the right global business" to work with on this large-scale change.
"Like GE Appliances, Electrolux has a nearly 100-year history in home appliances and they share the same principles of quality, innovation and customer value as GE," says GE Chairman and CEO Jeff Immelt. "They are committed to supporting the growth of GE Appliances and value the GE Appliances team and its capabilities.”
As part of the deal, Electrolux has agreed to continue using the GE Appliances brand, which carries name recognition among consumers and kitchen design and construction professionals. In 2013, REMODELING completed its most recent Brand Use Study in which industry professionals were asked about their brand preferences across dozens of product categories. GE Appliances was No. 1 or 2 in brand familiarity for the Dishwashers, Laundry, Ranges and Cooktops, and Refrigerators product categories, and was No. 1 in the same four categories for brands used in the last two years, and brands used most. Meanwhile, brand familiarity and use for Electrolux products was far lower. Its best showing was in 9th place for Laundry brands used in the last two years. The GE Appliances acquisition is likely to bolster its positioning across all categories.
“This is an historic moment and important strategic move for the Electrolux Group, which takes our company to a new level in terms of global reach and market coverage," says Keith McLoughlin, president and CEO of Electrolux. "GE’s premium, high-quality appliances complement our own iconic brands and will enhance our presence in North America. The acquisition, which is our largest ever, strengthens our commitment to the appliance business and also provides Electrolux with the scale and opportunity to accelerate our investments in innovation and global growth.”
Both brands expect the sale to be completed in 2015.