Haier Group, the world’s biggest appliance maker, is buying General Electric’s appliance business for US$5.4 billion to expand its global presence.
The acquisition announced Friday comes as Haier tries to shed its image as a low-cost brand and move into premium market segments. GE is shifting emphasis from traditional businesses to higher-technology, higher-profit areas such as medical equipment.
The two companies said they also agreed to form a strategic partnership to cooperate in areas such as the internet, healthcare, and advanced manufacturing.
Haier, headquartered in the eastern Chinese city of Qingdao, Shandong province, reported 2014 revenue of US$32.6 billion.
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It said the GE acquisition would be carried out by its unit Qingdao Haier Co., a publicly traded entity of which Haier owns 41 per cent.
GE Appliances reported US$5.9 billion in 2014 revenue. It has 12,000 employees, 96 per cent of them in the United States.
“This strategic alliance provides a new starting point for both Haier and GE and I am confident that this partnership will deliver enhanced value to the stakeholders of both companies,” said Haier Group chairman Zhang Ruimin in a statement