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GE & Haier: A Match Made In M&A Heaven

2/11/2011 09:04:00 AM

Forecasting a revitalized merger and acquisition market, the folks at Dow Jones Investment Banker have revisited a favorite rumor-du-jour, circa 2008: Haier’s purchase of GE Appliances. “While not probable,” DJIB writes, “the provocative prediction has a compelling logic and could create value.”

With GE’s stock in the doldrums, they argue, “Shareholders wouldn’t balk at cashing out of a business that, whatever its iconic status, accounts for just 2 percent of profits.” GE had hoped to get a minimum of $5 billion for the division before calling off the sale, putting it well within reach of Haier, which has a market cap of about $25 billion and a relatively clean balance sheet, the Dow Jones researchers said.

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