Largest-ever acquisition for Electrolux amounts to USD 3.3billion

Following reports Electrolux was in talks to buy GE Appliances, the Swedish appliance manufacturer has now entered into an agreement to buy the American company for USD 3.3billion.

The acquisition also includes a 48.4% shareholding in the Mexican appliance company Mabe, as GE has had a joint venture with the company for the past 30 years. Mabe develops and manufactures portions of GE Appliances’ product offering.

This acquisition of GE Appliances will be funded by a committed bridge facility, arranged by Deutsche Bank and Skandinaviska Enskilda Bunken, and is planned to be replaced by capital market and bank financing (approximately 75%) and a rights issue (approximately 25%).

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GE Appliances had sales of USD 5.7 billion and an EBITDA of 390million, in 2013, including share of income from Mabe. It operates its own distribution and logistics network and has nine manufacturing facilities and employs 12,000 staff.

The acquisition will create a platform for growth in the North American appliance market, with GE complementing Electrolux’s current brands in the United States. GE generates more than 90% of its revenue in North America.

President and CEO of Electrolux, Keith McLoughlin commented: “This is an historic moment and important strategic move for the Electrolux Group, which takes our company to a new level in terms of global reach and market coverage. GE’s premium, high quality appliances complement our own iconic brands and will enhance our presence in North America.”

He continued: “The acquisition, which is our largest ever, strengthens our commitment to the appliance business and also provides Electrolux with the scale and opportunity to accelerate our investments in innovation and global growth.” He added: “GE Appliances is a well-run operation with strong capabilities in key areas such as R&D, engineering, supply chain and customer service and we look forward to joining forces with their team of talented and competent people.”

The acquisition is expected to close during 2015.