NEW YORK – General Electric confirmed that it is considering the sale of its historic appliance division, part of its effort to focus on selling more complex and profitable industrial equipment.
The confirmation came after the Swedish appliance maker Electrolux released a statement Thursday that it was in discussions to buy the business from GE, which is based in Fairfield, Connecticut.
“GE is evaluating a wide range of strategic options for our appliances business, including discussions with Electrolux and other interested parties,” said GE spokesman Seth Martin.
General Electric Co. has said it plans to sell businesses worth about $4 billion this year. The company’s appliance division -maker of the first electric toaster more than a century ago – has been thought to be a candidate for sale.
GE’s appliance division, which includes a much smaller lighting business that is not being discussed as part of this transaction, earned $381 million on $8.3 billion in sales last year, for a profit margin of 4.6 per cent. The company’s industrial division as a whole earned $16.2 billion on sales of $103.6 billion, for a far more robust margin of 15.7 per cent.
GE appliances are sold mostly in the U.S., making it difficult to compete with more global competitors such as LG and Samsung, which have been expanding into the U.S. in recent years.
GE spun off its consumer credit card division late last month, it sold NBC Universal last year, and it is gradually shrinking its large financial division as part of its recent strategy to concentrate on building and servicing large equipment such as aircraft engines, gas-fired turbines, medical imaging machines and oil and gas drilling equipment. In June GE agreed to buy the electric power and transmission assets of France’s Alstom for $17 billion.
Electrolux, based in Stockholm, owns brands such as Frigidaire, Westinghouse, and Eureka.
General Electric Co. shares edged up 5 cents to$25.88 in trading Thursday. Its shares are up more than 7 per cent in the past year.
© The Canadian Press, 2014