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Electrolux Confirms GE Buyout Talks

Charlotte, N.C. — Electrolux confirmed this morning that it is in discussions with GE to acquire its appliance business.

The announcement supports recent industry chatter suggesting that GE has been shopping its white-goods operation around in recent months.

Another possible suitor may be Quirky, a crowdfunded New York start-up that openly solicits product concepts and works with various manufacturers and retailers to bring them quickly to market.

GE has taken an equity position in Quirky, and is particularly interested in the company’s home-automation spinoff Wink, which has developed an open platform and such connected products as Aros, a room A/C that self-adjusts to usage patterns and can be controlled remotely via mobile device.

According to a Bloomberg report, Quirky would lead a group of private-equity investors in acquiring a majority stake in GE Appliance while GE would retain a minority position in the business.

The for-sale signs returned to GE’s Appliance Park manufacturing complex eight years after the manufacturer first put its Louisville, Ky.-based majap business up for grabs. At that time, GE was looking to sell, spin-off or form a joint venture for the division at an estimated price tag of up to $8 billion.

The current asking price is about $2 billion, unnamed sources told Bloomberg.

Contenders in 2008 included LG Electronics, Turkish majap maker Arcelik, and GE’s Mexican production partner Controladora Mabe, although Haier became the leading acquisition candidate. The Chinese manufacturer eventually backed out due to weakening U.S. market conditions and difficulty obtaining financing.

GE later added its lighting and distribution equipment businesses to the package, but eventually dropped its sale plans and instead invested $1 billion in the appliance division in an effort to bring production back to the U.S. and update its plants and products.

In a statement, Electrolux indicated that no agreement had been reached and couldn’t assure that one would.

An acquisition by Electrolux would give the Swedish manufacturer a leading share of the U.S. majap market. According to TWICE market research partner The Stevenson Company, GE is roughly tied with Whirlpool brand for first place, with each controlling just over 15 percent of the market, while Electrolux’s largest U.S. brand, Frigidaire, trails Kenmore, LG, Samsung and Maytag for seventh place.