NEW HAVEN, Conn. - General Electric Co. said yesterday that it planned to sell or spin off its iconic appliance business, which for a century has sold refrigerators, air conditioners and ovens for millions of homes.
The industrial conglomerate said in a statement that the move was part of an ongoing plan to exit "slower-growth and more volatile businesses."
GE's 101-year-old appliance business, based in Louisville, Ky., has been hurt by the housing slump and economic slowdown in the U.S. The appliance division had revenue of $7 billion last year, about 4 percent of GE's total, and employs 13,000 people worldwide.
"GE Appliances has a very strong brand . . . and for more than 100 years has been one of the icons associated with GE in the United States," GE chairman and chief executive Jeff Immelt said. "However, it remains primarily a U.S. business, meaning its fortunes are tied to the rise and fall of a single market."
The company is planning a strategic review that could result in a sale of GE Appliances, a strategic partnership or a spin-off to shareholders.
Last year, the Fairfield, Conn., company sold its underperforming plastics business to a Saudi Arabian company for $11.6 billion.
"We think this is further recognition the company needs to exit the slow- and no-growth businesses," Robert Schenosky, an industrial analyst with Jefferies & Co. in New York, said. "It's a recognition that there is not anything that is untouchable at this point."
Schenosky said it was hard to predict what else GE might sell.
"Certainly other candidates could include the lighting business and even potentially NBC Universal," he said.
Analysts estimate sales in the appliance business are likely to decline between 10 percent and 12 percent this year. That stems from weak consumer spending and a drop in home-improvement sales and residential construction.
Some have suggested a sale price of around $6 billion.