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Electrolux said in August it was in talks to buy
the unit to tap into a market where it has lacked scale and that
is growing faster than Europe.
Reuters reported earlier this month a deal was near completion.
"GE's premium, high-quality appliances complement our own iconic
brands and will enhance our presence in North America,"
Electrolux Chief Executive Keith McLoughlin said in a statement.
"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."
Electrolux, which sells under brands such as Frigidaire, AEG and
Zanussi as well as its own name, is already the world's
second-largest home appliance maker after Whirlpool, but has its
strongest market position in Europe.
In 2013, western Europe accounted for 28 percent of group sales
while North America represented 32 percent. Organic growth in
North America was 7 percent while in Europe it was 0.4 percent.
The purchase of GE's Appliance's business - including cookers,
refrigerators, air conditioners and water heaters - will more
than double Electrolux's sales in the U.S. market from the 31.9
billion crowns ($4.5 billion) it had in 2013.
Last year, GE's Appliance business had sales of $5.7 billion, 90
percent of which were in North America, with earnings before
interest, tax, depreciation and amortization of $390 million in
2013.
Electrolux said the deal would be financed by a bridge facility
and that it would undertake a rights issue corresponding to
approximately 25 percent of the consideration following
completion of the acquisition.
The transaction is expected to generate annual cost savings of
around $300 million and to be earnings accretive from the first
year.
(Reporting by Simon Johnson; Editing by Matt Driskill and Susan
Thomas)
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