General Electric Co Chief Executive Jeff Immelt on Wednesday named five non-U.S. appliance manufacturers, including China‘s Haier, South Korea‘s LG Electronics, Sweden’s Electrolux, Mexico‘s Controladora Mabe and Turkey’s Arcelik, as potential bidders for the company’s century-old appliances business.
The chief of the second-largest U.S. company by market capitalization said 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,” Immelt told reporters in South Korea. “It is Haier in China, it is LG in Korea, it’s Mabe in Mexico, it’s Arcelik in Turkey.”
In Beijing, he added another name to the list of suspects: “Whether LG or Haier or Electrolux or others participate remains to be seen.”
None of those companies confirmed their interest.
After stunning investors in April with an unexpected drop in quarterly profit, GE said this month it would look to sell or spin off its appliances unit, saying the business was too focused on the United States.
Analysts and investors have estimated the business, which is No. 2 in the U.S. behind Whirlpool Corp. 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 said.
STILL ‘EARLY ON’
Immelt’s remarks came just a week after he told investors GE that the company was “seriously” considering spinning off the appliances unit.
“The appliance process is still very early on, and much still has to be decided,” Immelt said in Beijing on Wednesday.
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.
Goodmorning Shinhan Securities analyst Steve Lee said, “I doubt LG Elec would be interested in pursuing this deal, since there’s little the company can gain. There’s a lot of overlap between the businesses with little premium potential for LG.”
Lee said Immelt’s comments could be aimed at drumming up interest from a small pool of potential candidates with deep-enough pockets to buy the business.