By Chris Nicholls
SEOUL: General Electric (GE) chief executive Jeff Immelt has confirmed both Haier and LG are in the running to purchase its whitegoods division, which was announced for sale, partnership or spin-off on 16 May.
Speaking to journalists during a visit to South Korea yesterday, and reported on Reuters news service, Immelt said the major potential suitors had become clear.
“The players have become somewhat obvious. It is Haier in China, it is LG in Korea, it’s Mabe in Mexico, [and] it’s Arcelik in Turkey,” he said.
LG, he said, was “clearly one of the leading candidates.”
"They are a great company. They already have a presence in the US," he said.
“Strategically, there are many things to be admired about a combination of LG and GE Appliances.”
Immelt remained coy on the final outcome, though, saying it “will be very intriguing to see what happens”. He said merely that “it will fill lots of newspaper articles … for the next six to nine months”.
GE announced the “strategic review” of the appliances division on 16 May after days of rumours circulating on the possibility. Despite the 16 May announcement, GE Corporate public relations director, Peter O’Toole, told Current.com.au on 15 May the rumours were just that and refused to comment.
In its official announcement, GE said it was looking at three possibilities for the unit – a strategic partnership or joint venture, a spin off or the sale of the business, with hopes of taking the business global.
“This review is consistent with the strategy we have been executing to transform our portfolio for long-term growth,” said Immelt. “Since 2003 we have exited slower growth and more volatile businesses, generating US$52 billion in gross proceeds from dispositions.
Immelt said while GE Appliances was a “very strong brand”, it remained primarily a US business and that whichever solution it chose, GE wanted to “give appliances the global reach and investment required to compete more effectively”.
Immelt also said despite the decision, the current management team would remain.
GE Appliances turned over US$7.2 billion last year.
LG Australia was contacted with regards to this story but declined to comment until matters were confirmed.