F&P Appliances owner Haier buys GE's US operation for $US5.4 billion
The Chinese owner of Fisher & Paykel Appliances has bought General Electric‘s US-based appliance business for $US5.4 billion.
The Haier Group outbid other foreign corporate bidders for the Louisville, Kentucky-based operation.
The purchase means Haier will take over GE's nine appliance-manufacturing plants, 12,000 in staff and a wide range of household devices.
It is also the largest deal by a Chinese company in the US since Shuanghui International bought pork producer Smithfield Foods in 2013.
GE had been running an auction for the century-old appliance business since it abandoned a $US3.3 billion sale to Sweden’s Electrolux in December.
The US Justice Department had sued to block that transaction, saying the combination would hurt competition for cooktops and ranges.
In seeking a fresh buyer, GE executives wanted “a better deal” than they had gotten from Electrolux, one source told the Journal.
GE also stands to receive a $US175 million breakup fee from the failed Electrolux deal.
GE had previously tried to sell its appliance division before the global financial crisis but had to pull the sale when markets turned.
Struggle to gain US market share
Meantime, the deal ends Haier's decade-long attempt to gain a major foothold in the US market. It was previously mainly known there for niche products such as compact refrigerators and window air-conditioning units.
In August, Haier said it would invest $US72 million to expand its 15-year-old refrigerator plant in Camden, South Carolina.
The GE transaction will vault the Chinese company past Electrolux and other rivals to second after Whirlpool in the US whitegoods market. GE Appliances & Lighting had sales of $US8.4 billion in 2014.
Haier previously talked with GE in 2008 to buy the appliance unit but considered the price too high. Haier also made an unsuccessful bid for Maytag in 2004 but lost out to Whirlpool.
The purchase of New Zealand’s Fisher & Paykel Appliances was completed in November 2012 for nearly $1 billion.
The company sold its finance arm to Australia’s FlexiGroup in October last year for $315 million.