Haier Group (“Haier”) and General Electric (NYSE: GE; “GE”), today announced a Memorandum of Understanding (“MoU”) to cooperate globally and jointly pursue growth projects in focus areas where both companies can increase business competitiveness such as Industrial Internet, healthcare, and advanced manufacturing. This strategic cooperation framework agreement brings together two highly complementary world-class enterprises and establishes a model for cross-border investment and cooperation between China and the United States.
In addition, Qingdao Haier Co., Ltd. (SHA: 600690; “Qingdao Haier”), a Shanghai stock exchange listed company that is 41% owned by Haier, will acquire the GE Appliances business (“GE Appliances”). Qingdao Haier acquired all overseas operations of Haier Group in June 2015, as part of the expansion of Haier’s global business. The coming together of Qingdao Haier and GE Appliances will further enhance Qingdao Haier’s global competitiveness. GE Appliances has more than 100 years of brand heritage, a loyal mid- to high-end customer base, a highly experienced and accomplished management team, a distinctive corporate culture, a strong white goods portfolio, an extensive self-owned logistics and distribution network in the North American market, and an established quality control system.
GE Appliances is headquartered in Louisville, Kentucky and is a leading home appliances company in North America. The business has nine manufacturing plants across five states in the U.S. and has built world-class logistics and distribution capabilities as well as strong customer relationships in both the retail and contract channels. In 2014, GE Appliances had approximately US$5.9 billion in revenue and $0.4 billion in EBITDA. The company employs approximately 12,000 employees globally, 96% of whom are based in the United States.
The acquisition of GE Appliances is an important investment in expanding Haier’s presence in the U.S. and in the Western hemisphere. GE Appliances will remain headquartered in Louisville, Kentucky. The business will continue to be operated independently under the direction of a local board with the participation of GE’s current senior management team, who will guide the strategy and operations of the business. Haier is committed to investing in the continued growth of the U.S. business.
This transaction will create immediate and long-term value not only for the communities in which both companies operate, but also for employees, customers, business partners, and shareholders. Haier and GE Appliances will support and have access to consumers and suppliers in Haier’s and GE’s respective and complementary regions. In particular, this transaction will provide GE Appliances access to the demand for its high-quality products in the China market and position the company for further international growth. Furthermore, by creating a larger, more global company, the transaction will provide increased opportunities for all employees.