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Haier a suitor for GE division

(China Daily/Agencies)
Updated: 2008-05-29 14:57

LG Electronics and China's Haier Group Corp are among the potential suitors for General Electric Co's century-old appliances division, said Jeffrey Immelt, CEO of the US company.

"The players have become very obvious," Immelt said at a breakfast meeting with businessmen in Seoul yesterday. "It's Haier in China, LG in South Korea and so on."

Buying GE's unit would help LG Electronics challenge Whirlpool Corp's lead in appliances worldwide, while a purchase by Haier would give the Chinese company a household name to help drive its US expansion.

GE said this month it may sell the unit amid calls for the company to speed up divestitures of slower-growing operations.

"Both LG and Haier need GE to break into the US market, because it has a very strong brand," Castor Pang, an analyst at Sun Hung Kai Securities in Hong Kong, said. "Buying GE would be a big advertisement for them. After all, the US market is still a very big one."

GE's appliances division may fetch as much as $8 billion, according to estimates by analysts at Citigroup and Goldman Sachs Group.

LG is "carefully monitoring" the sale of GE's appliances division, CEO Nam Yong said, declining to say whether LG would bid. The Korea Exchange asked LG Electronics to clarify by yesterday whether the company is interested in bidding.

Na Joo Young, a spokeswoman for LG, declined to elaborate on Nam's comments. Zhao Rui, a spokeswoman for Haier, declined to comment.

Immelt said the sale of the appliances unit "will be a long process". Other potential bidders mentioned by Immelt included Mexico's Controladora Mabe and Turkey's Arcelik.

GE's appliances business had 27 percent of the US market in 2006, according to Stephen Tusa, an analyst at JPMorgan Chase & Co. The unit had revenue of $7.2 billion in 2007, according to Credit Suisse Group estimates.