Swedish appliance maker Electrolux AB revealed that it has held preliminary negotiations with General Electric Co. over the acquisition of the latters appliance business. This step makes the company part of other potential suitors, who have been focused on contracts that would provide them with the opportunity to expand their reach in North America.
Still, Electrolux AB only revealed its interest in a brief statement, and explained that there is no guarantee that a deal between the two parties will be closed. As reported by the Wall Street Journal, the company shared that “no agreement has been reached and there can be no assurances that an agreement will be reached”.
Mr. Seth Martin, who is a spokesman of General Electric Co., also confirmed the preliminary talks between the two companies, but refused to reveal who the other bidders are, apart from Electrolux AB. He said in a statement, which was cited by Bloomberg: “GE is evaluating a wide range of strategic options for our appliances business including discussions with Electrolux and other interested parties.”
This is the second time when General Electric Co. is trying to sell its appliance unit over the last few years. The company initially put the unit for sale in 2008. It now confirmed its intentions to consider different strategic options for its appliance business, including selling it to another company.
The Chief Executive Officer of General Electric Co. Mr. Jeff Immelt has been recently trying to shift the companys focus towards its industrial business. This year a stake in the store credit card business of the company in North America was sold.
A person with knowledge of the matter, who asked not to be named because the information is still not public, reported that the fiveyearold startip Quirky is also interested in the appliance business of General Electric Co. Ms. Tiffany Markofsky, who is a spokeswoman of the startup, refused to make any comments on Quirkys interest in the unit.
Electrolux AB added 1.39% to trade at 175.00 Swedish kronas per share by 11:28 GMT, marking a one year change of 4.32%. According to the information published on the Financial Times, the 19 analysts offering 12month price targets for Electrolux AB have a median target of 185.00, with a high estimate of 205.00 and a low estimate of 132.00. The median estimate represents a 7.18% increase from the last price of 172.60.
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