Threat to Samsung, LG
Swedish household appliance maker Electrolux will buy GE's appliance business for US$3.3 billion (about 3.38 trillion won). Much attention is being paid to how the deal will affect Samsung and LG Electronics, which are aiming to nap the top spot in home appliance rankings next year by targeting North America and Europe as major markets.
According to overseas media outlets and industry sources on Sept. 9, Electrolux officially announced its decision to acquire GE's appliances division on Sept. 8 (local time). After the deal, the Swedish company is expected to turn over US$22.5 billion (around 23 trillion won) a year.
Electrolux's annual sales in North America is likely to more than double to reach US$10 billion (10.25 trillion won) or more. The number is similar to Whirlpool, the largest household appliance maker in the U.S., and thus the Swedish firm is expected to go head to head with Whirlpool in the U.S. market. So far, Electrolux has maintained the runner-up position in North America with GE in third place, following Whirlpool.
The Swedish firm will continue to use the GE brand in home appliances like refrigerators, microwaves, and air conditioners.
As Electrolux is intensifying efforts to target North America after Europe, local household appliance makers like Samsung and LG Electronics are expected to suffer heavily in North America and Europe. When GE first tried to sell its appliances unit six years ago, those Korean companies also reportedly reviewed the M&A deal.