Who Will Use GE’s Name?

Last week there was a little reported story that mentioned that Haier, a Chinese appliance company, and Blackstone, a private equity firm that the Chinese government made a 10% investment in last year, were considering/bidding for GE Appliances, which includes GE Appliances, GE Lighting and GE Consumer & Industrial.

As reported last month, GE is also considering spinning off this group into a separate company.

The Haier/Blackstone bid becomes intriguing. For Haier, the appliance division provides a platform to enter the U.S. market, providing an extensive distribution network, and probably offers manufacturing and operational synergies.

For Blackstone, which would probably focus on GE Lighting and GE Consumer & Industrial, these are regarded as the two profitable segments of this division. The lighting group represents a potential energy play, especially with GE reportedly having technology for next generation incandescents as well as LED technology. Eventually there could be a sale to Matsushita (Panasonic/Universal), TCP (a Chinese company with extensive banking/government connections), Foshan Lighting, or a number of other energy related companies (perhaps even a sale or merger with Cree to provide Cree a distribution network for when LEDs become cost competitive with CFLs, based upon cost/lumens).

The C&I group could be a “cash cow” or could be positioned for a sale to possibly ABB (which would give them much broader distribution), Rockwell (as a product complement as well as an anti-takover strategy), or another foreign company interested in entering the U.S. and in need of a distribution platform (or perhaps someone like Emerson, Danaher, or Dover – companies that focus on profit making companies and run decentralized organizations). And remember that Eaton once had interest in Cooper, perhaps it could work in reverse?

Another interesting sideline to GE’s divestiture is what happens to the brand? Lightbulbs and appliances have been synonymous with the GE name for eons. How long will the GE name be licensed to acquiring companies? What is the worth of these companies without the GE name? What will be the cost of transitioning to another name over a period of time? For the appliance division, moving to Haier, or a brand name, shouldn’t be a problem (witness IBM and Lenovo), but lamps?

If the company is sold rather than spun-off, what longer-term impact on the industry, and your business, do you think this could have? Could the sale of GE be a non-event for distributors unless the divisions are sold to current electrical manufacturers?