Haier Eyes GE Unit
LG Electronics and China’s Haier Group Corp are among the potential buyers of the century-old appliances division of General Electronics.
According to Stephen Tusa, an analyst at JP Morgan Chase& Co, GE’s appliances business had 27% of the US market in 2006. And Credit Suisse Group estimates that the unit had revenue of $7.2 billion in 2007. But amid calls for the company to speed up divestiture of slower-growing operations, GE announced this month its plan to sell the unit.
Buying GE’s unit will help LG Electronics challenge Whirlpool Corp’s lead in appliances around the globe while a purchase by Haier will make it a household name to promote its expansion in the US.
“Both LG and Haier need GE to break into the US market, because it has a very strong brand,” said Castor Pang, an analyst at Sun Hung Kai Securities in Hong Kong. “Buying GE would be a big advertisement for them. After all, the US market is still a very big one.”
“The players have become very obvious. Its Haier in China, LG in South Korea and so on”, said Jeffrey Immelt, CEO of the US company. Other potential bidders mentioned included Mexico’s Controladora Mabe and Turkey’s Arcelik.
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