Barely a month has passed since General Electric (GE, Fairfield, Connecticut / USA; www.ge.com) terminated its deal with Sweden’s Electrolux (Stockholm; www.electrolux.com), whose proposed USD 3.3 bn takeover of the former's Appliances business received a critical review from the US Justice Ministry in December last year, and was subsequently scrapped (see Plasteurope.com of 15.12.2015). But true to the adage “out with the old and in with the new”, the US consumer goods giant in mid-January announced that it has found a new buyer for the unit, considered to be one of the US’ leading integrated injection moulders. In monetary terms, the definite agreement signed with China’s Haier (Qingdao; www.haier.net) is much higher than what the Swedes had proposed. The global market leader will pay an impressive USD 5.4 bn for the business once all regulatory authorities have given the thumbs-up – with the deal expected to close by mid-2016.

The transaction values GE Appliances at 10 times the last 12 months of earnings before interest – a relatively high goodwill share considering that the norm for deals of this kind is six or seven times the EBITDA multiple. GE headquarters will remain in Louisville, Kentucky / USA and the two companies also entered into a long-term agreement giving Haier the rights to use the GE brand. In addition, the two companies undertook to collaborate in the fields of industrial internet, healthcare and advanced manufacturing, adding that GE will help Haier enhance the efficiency of its manufacturing plants, while Haier will help the US group implement its “Predix” platform. The two companies also agreed to work together on developing and growing affordable consumer health initiatives in China.

When announcing the deal, GE chief executive Jeff Immelt said Haier is committed to growing the business globally, while adding that the company sees a great opportunity “to work together to build the GE brand in China”. Haier CEO Zhang Ruimin added that, “Haier is committed to investing in the US. In addition, together Haier and GE will explore opportunities for joint collaboration, and, in so doing, establish a type of new alliance with comprehensive strategic cooperation between two world-class enterprises.”

The deal is the second major acquisition by a Chinese player this year, indicating that the country is ready to deliver on the "Made in China 2025" programme, which foresees a strengthening of the local industry. Earlier this month, China National Chemical Corporation (ChemChina, Beijing / China; www.chemchina.com.cn) acquired German injection moulding machinery maker KraussMaffei Group (KM, Munich; www.kraussmaffei.com) for close to EUR 1 bn (see Plasteurope.com of 11.01.2016).