From Louisville and Cleveland to Qingdao and New York?
As many know, GE considered selling its GE Appliance division, which consists of GE Appliance and GE Consumer and Industrial (or Lighting and Gear) earlier this year. Subsequently, finding either a slow market and/or few interested parties at the desired price, GE announced that it was going to do a spin-off late this year / early next year.
With the current economic problems and credit availability, it is doubtful that the deal could be done this year, but according GE’s CFO, Keith Sherin, in a report from Reuters, the spin-off is more likely next year, although, “”If we got a tremendous offer for appliances, we’d have to evaluate that.”
Over the past few weeks, we’ve heard from a number of distributors that something may be occuring.
In August it was rumored that Haier was interested in the appliance group and that a private equity firm would acquire lighting and gear. This was later denied but Haier obviously has interest as this is the second time (first was in the spring) that their name has been linked to a GE acquisition.
Another company, Matsushita, could also be interested. The company recently announced that it will be changing its name, globally, to Panasonic. They also have almost $11B in cash (something GE needs in the current economic environment), there are product synergies and, here in the U.S., Matshushita owns Universal Lighting Technologies which matches well with GE Lighting, especially given Philips’ new branding of Advance. Panasonic is also involved in lighting, factory automation and much more.
We don’t have the inside track, but we are hearing:
- Haier to acquire the appliance and lighting groups, while licensing the GE name for these products.
- GE gear to be absorbed into GE Energy, which could represent more opportunities for GE distributors.
What could this mean for distributors? Probably no change. Maybe a little bit more sales resources (or management resources) if the two companies (lighting and gear) are treated as separate companies. Maybe more financial resources devoted to each company.
And Haier is located in Qingdao with Haeir America headquartered in New York. Louisville and Cleveland are homes to GE.
Your thoughts? What are you hearing?