General Electric Co.'s CEO Jeff Immelt has named
five non-U.S. appliance manufacturers as potential bidders for the company's appliance businesses, according to a Reuters report.
The companies are China's Haier, South Korea's LG
Electronics, Sweden's Electrolux, Mexico's Controladora Mabe and Turkey's
Arcelik.
According to the report, Immelt says that it
was "obvious" who would be interested in the unit, which last year sold $7.2
billion worth of refrigerators, washing machines and other household
appliances.
"The players have become somewhat obvious," says Immelt, according to the Reuters report. "It is Haier in China, it is LG in Korea, it's Mabe in Mexico, it's
Arcelik in Turkey."
In April, GE reported a drop in quarterly
profits, and GE announced it would look to sell or spin off its appliances
unit, saying the business was too focused on the United States and not focused enough on the global market.
The Reuters report added that analysts and investors have estimated the business, which is No. 2 in the
U.S. behind Whirlpool Corp., Benton Harbor, Mich., could sell for $4 billion to $8 billion.
Whirlpool is the world's largest appliance maker.
Immelt's comments could be an effort to see if there are other interested
bidders who have not yet made themselves known to the company, said Peter
Sorrentino, senior vice president and portfolio manager at Huntington Asset
Advisors, which manages $6.5 billion in assets and holds GE shares."I wonder if he's not tapping tree trunks with a stick trying to figure out
if there's bees in there," Sorrentino told Reuters.
GE's well-known brand name could appeal to a foreign appliance manufacturer
looking to build its profile in the United States while capitalizing on
lower-cost production.
According to the report:
- LG has not decided whether to bid for the GE unit.
- Haier reportedly has some interest, but declined comment. Electrolux and Arcelik also declined comment.
- Immelt said LG was a leading candidate, but analysts were uncertain if LG would be interested in the purchase as they already have a presence in the U.S.
- South Korea's Samsung Electronics and Italy's Indesit Co
SpA also have been touted as possible bidders, but neither has
confirmed an interest.
