General Electric is selling its appliance business to China’s Haier Group for $5.4 billion in cash. The sale is part of GE’s plans to sell off its non-core businesses while shifting to a more technologically-based focus.
The deal arrives just weeks after GE declined to sell the business to Sweden’s Electrolux for $3.3 billion.
The deal values the company’s appliance business at 10 times last 12 months earnings before interest, taxes, depreciation, and amortization (EBITDA).
GE said earlier this week it would shift its headquarters to Boston, a move aimed at lowering its tax bill and tapping talent in city that is fast becoming a tech hub.
For Haier, the deal means ownership of a century-old appliance business that manufacturers a well-known lineup of refrigerators, freezers, clothes washers and dryers. The business includes brands such as Monogram, Café, Profile and Artistry.
GE’s appliance business is second only to Whirlpool Corp in the US.
Haier’s US business held less than 5% of the market last year.
The transaction includes GE Appliances’ 48.4% stake in Mabe, a Mexican appliance company that has a joint venture and a sourcing relationship with the business for the last 28 years.
The deal must still gain approval China and receive antitrust approvals in the United States, Mexico and Argentina.
Haier plans to continue its use of the GE Appliances brand and retain the business’s headquarters in Louisville and Kentucky.