Sweden’s Electrolux (ELUXb.ST) said on Monday it would buy General Electric Co’s (GE.N) appliances business for $3.3 billion in cash to double sales in North America and take on rival Whirlpool Corp (WHR.N) in its biggest ever deal.
Electrolux said in August it was in talks to buy the unit to tap into a market where it has lacked scale and that is growing faster than Europe.
Reuters reported earlier this month a deal was near completion.
“GE’s premium, high-quality appliances complement our own iconic brands and will enhance our presence in North America,” Electrolux Chief Executive Keith McLoughlin said in a statement.
“The acquisition, which is our largest ever, strengthens our commitment to the appliance business and also provides Electrolux with the scale and opportunity to accelerate our investments in innovation and global growth.”
Electrolux, which sells under brands such as Frigidaire, AEG and Zanussi as well as its own name, is already the world’s second-largest home appliance maker after Whirlpool, but has its strongest market position in Europe.
In 2013, western Europe accounted for 28 percent of group sales while North America represented 32 percent. Organic growth in North America was 7 percent while in Europe it was 0.4 percent.
The purchase of GE’s Appliance’s business – including cookers, refrigerators, air conditioners and water heaters – will more than double Electrolux’s sales in the U.S. market from the 31.9 billion crowns ($4.5 billion) it had in 2013.
Last year, GE’s Appliance business had sales of $5.7 billion, 90 percent of which were in North America, with earnings before interest, tax, depreciation and amortization of $390 million in 2013.
Electrolux said the deal would be financed by a bridge facility and that it would undertake a rights issue corresponding to approximately 25 percent of the consideration following completion of the acquisition.
The transaction is expected to generate annual cost savings of around $300 million and to be earnings accretive from the first year.