GE Appliances Said to Draw Electrolux, Quirky as Suitors

By David Welch and Richard Clough

General Electric Co. (GE)’s home appliance business has drawn interest from Sweden’s Electrolux (ELUXB) AB and Quirky Inc., a consumer-product development startup, two people with knowledge of the matter said.
The companies are in talks to buy the century-old unit that GE recently decided to try again to sell as Chief Executive Officer Jeffrey Immelt focuses on industrial operations, said the people, who asked not to be identified because details are private. Quirky would team up with private-equity firms to acquire a majority stake, leaving GE with a minority holding, the people said.
The appliance division may fetch about $2 billion in a sale, the people said. There’s no guarantee that the discussions will lead to an agreement, they said.
Quirky, which builds products based on
ideas submitted by a community of online users, counts Fairfield, Connecticut-based GE among its financial backers after the manufacturer made a $30 million investment in November.
GE also opened up thousands of patents to New York-based Quirky when they formed a partnership last year to develop a line of smart-home devices, including an air conditioner controlled by smartphones. Electrolux is No. 2 in U.S. sales of appliances such as dishwashers, cooktops and refrigerators, behind Whirlpool Corp., according to research service Statista. GE ranked third by market share, Statista’s data show.

Photographer: Drew Angerer/Bloomberg

Jeffrey Immelt, Chairman and Chief Executive Officer of General Electric Co.

Electrolux Strategy

Electrolux, the Stockholm-based maker of AEG stoves and Frigidaire refrigerators, is looking to boost revenue in Europe and the U.S., its largest single-country market, after several years of stagnant sales. While the company intends to expand organically, CEO Keith McLoughlin said last month in a Bloomberg Television interview that the company would consider acquisitions “when we see an opportunity that makes sense.”
Seth Martin, a spokesman for GE, declined to comment on the interest in the appliance unit, as did Tiffany Markofsky, a spokeswoman for Quirky. Eloise Hale, a U.S.-based spokeswoman for Electrolux, also declined to comment.
The sale process is GE’s second attempt to offload the Louisville, Kentucky-based division, which introduced an electric toaster in 1905 and a home electric washing machine in 1930. In May 2008, GE said it hired Goldman Sachs Group Inc. to explore options, saying then that the unit was too tied to the tumultuous U.S. market and needed a more global focus.
After GE’s financial arm threatened to drag down the company during the 2008-09 credit crunch, Immelt began reshaping the parent around its industrial units. He sold real estate holdings and stakes in foreign banks, and also exited NBCUniversal.
Last month, the company conducted an initial public offering of GE Capital’s North American consumer-lending unit as part of a plan to eventually split off the rest of those operations.
Chief Financial Officer Jeff Bornstein said in an interview last month that GE plans to divest about $4 billion in non-financial businesses this year.