According to Bloomberg LG is looking to expand their appliance market share by buying US appliance group General Electric. Also in the running is Chinese group Haier.
According to Bloomberg LG is looking to expand their appliance market share by buying US appliance group General Electric. Also in the running is Chinese group Haier.
General Electric Co. Chief Executive Officer Jeffrey Immelt said that GE is up for sale and that they are talking to several Companies.
Bloomberg say that buying GE’s unit would help Seoul-based LG Electronics challenge Whirlpool’s lead in the production of appliances worldwide, while a purchase by Haier would give the Chinese company a household name to help drive its U.S. expansion. GE said this month it may sell the unit amid calls for the company to speed up divestitures of slower-growing operations.
GE’s appliances division is the biggest provider of refrigerators, ovens and dishwashers for newly-built U.S. homes.
LG hasn’t decided whether to bid for the GE unit, the company said today in response to a query by the Korea Exchange. LG is “carefully monitoring” the sale of GE’s appliances division, Chief Executive Officer Nam Yong said yesterday. Zhao Rui, a spokeswoman at Haier, declined to comment.
LG Electronics shares fell 3.6 percent to close at 134,000 won in Seoul. The stock has declined 14 percent this month as analysts at JPMorgan Chase & Co. and Deutsche Bank AG cut ratings on the stock, citing lower earnings prospects.
“Both LG and Haier need GE to break into the U.S. 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 U.S. market is still a very big market.”
