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The unit is quite rudimentary, but it marks the entry of the company founded by Thomas Edison in the appliance market. One area in which the group will then become one of the world icons, enjoying for decades the rise of the “consumer society.”
Today, one hundred and five years later, General Electric’s yet ‘ready to part with all appliances. This is the Swedish Electrolux will recover this branch: toasters, but also the huge refrigerators, stoves, dishwashers, washing machines, water heaters or air conditioners. An agreement in principle to this effect was announced Monday, Sept. 8.
The transaction, the largest ever signed by Electrolux, $ 3.3 billion, or € 2.6 billion. Both parties hope to complete definitely the case in 2015.
General Electric planned for several years to withdraw from appliances. One area in which it employs 12,000 people and where he still achieved sales of $ 5.7 billion in 2013, but it weighs only 4% of the total turnover of the American industrial colossus.
Especially, household appliances no longer the goose that lays the golden eggs of General Electric. In this market, the competition is no thank you, especially with the Turkish and Asian manufacturers. Consumers are used to paying cheap and comparators internet rates tend to boost the price war. Result:. Western companies struggling
FIRST ATTEMPT IN 2008
In spring 2008, Jeffrey Immelt, CEO of General Electric, put once the case sale. It is justified by the fact that this industry is very dependent on the American market, which accounts for about 90% of its sales, and it needs to be globalized.
Several competitors show then stakeholders, including Electrolux, and Korean Samsung and LG. But the financial crisis that triggered the fall of Lehman Brothers in September 2008 upset all the plans, and the sale process is stopped.
This is only a postponement. Last financial storm, the direction of General Electric puts the project on track in early 2014.
Jeffrey Immelt intends to continue to redefine the contours of its business, to make “an industrial group a new type “, focusing on growing the business where it has advanced technologies and can make the difference. Trades such as turbines, where the American champion put his hand in June on the activity of the French Alstom after a battle with the German Siemens.
Conversely, General Electric has largely disengaged media, plastics, insurance and finance.
This year, several candidates have been in the running to take home appliances auctioned. In particular Quirky, a young American company that develops products based on ideas suggested by users, including General Electric and is a shareholder.
“OPPORTUNITY LIKE NO”
But Quirky finally had to give up, leaving only Electrolux finish negotiations. For the Swedish industrialist, is a “unparalleled opportunity” “a historic moment” , said Monday his boss Keith McLoughlin. The transaction allows Electrolux to further strengthen its grip on the highly competitive market for large appliances.
Its global sales will increase by 33% at once, reaching $ 22.5 billion per year. The movement looks particularly sharp in the United States, where Electrolux currently heels leader Whirlpool, while General Electric is third.
Already the owner of AEG and Frigidaire, Electrolux will now be able to operate as GE Monogram brands, GE Cafe and Hotpoint.
Obviously, the price seems high, well above the $ 2 billion raised so far. But this building on a vibrant American market today should provide the Swedish group relay welcome growth, while Europe is sinking into the doldrums. In addition, management expects the economies of scale of $ 300 million. The acquisition could thus rounding Electrolux profits after one year.
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