In addition, the two companies have agreed to jointly pursue global growth projects in focus areas including industrial internet, healthcare, and advanced manufacturing.
As part of the acquisition, GE will receive a cash consideration from Qingdao Haier of $5.4bn. The acquisition also includes GE Appliances’ 48.4% stake in Mabe, a Mexican appliance company that has operated a joint venture and has had a sourcing relationship with GE Appliances for 28 years.
As part of the transaction, under Qingdao Haier’s ownership, GE Appliances will continue to market the current portfolio of GE brands for a period of 40 years (inclusive of two 10-year extensions).
GE Appliances is headquartered in Louisville, Kentucky and is a leading home appliances company in North America. In addition to air conditioners, refrigerators and freezers, GE Appliances also manufactures cooking products, dishwashers, washers, dryers, water filtration systems and water heaters. The business has nine manufacturing plants across five states in the US. Revenues in 2014 were approximately $5.9bn. The company employs approximately 12,000 employees globally, 96% of whom are based in the United States.
The acquisition of GE Appliances is seen as an important investment in expanding Haier’s presence in the US and in the Western hemisphere. GE Appliances will remain headquartered in Louisville, Kentucky, and the business will continue to be operated independently under the direction of a local board with the participation of GE’s current senior management team. Haier says it is committed to investing in the continued growth of the US business.
Zhang Ruimin, chairman and CEO of Haier Group, commented: “This strategic alliance provides a new starting point for both Haier and GE. We share common goals that we hope to achieve together: enhancing the value of the Haier and GE brands and developing our employees by encouraging autonomous innovation and cooperation.”