Electrolux buying GE appliance unit

Electrolux has agreed to buy General Electric's century-old appliances unit for $3.3 billion in cash, putting the Swedish company on a par with industry leader Whirlpool Corp. of the United States.

The purchase, Electrolux's biggest, brings together brands such as Hotpoint, Frigidaire and Zanussi, and creates a company with annual revenue of about $22.5 billion. Acquiring the predominantly U.S. business will add to earnings from the first year, Stockholm-based Electrolux said Monday.

Electrolux and Whirlpool, with a plant in Middle Amana, will dominate the North American appliance market, according to Johan Eliason, an analyst at Kepler Cheuvreux. Each company will control about 40 percent of the industry in the region, he said in a note.

The deal makes Electrolux 'a major player that can take advantage of synergies,” said David Jacobsson Cederberg, an analyst at Pareto Securities. The Swedish company forecast annual cost benefits of about $300 million.

For Electrolux, the deal is the first since 2011, when it acquired Compania Tecno Industrial for about $690 million to become the largest appliance supplier in Chile and Argentina.

In addition to enhancing Electrolux's presence in North America, where the GE unit generates more than 90 percent of revenue, the acquisition will give the Swedish company a 48.4 percent stake in Mexican appliance company Mabe.

Electrolux said the deal is subject to regulatory approval. Given the significant boost to the company's U.S. market position, that isn't a given, according to Swedbank analysts.

The GE unit, which employs about 12,000 people, had sales of $5.7 billion last year, or 4 percent of GE's total revenue. About half of the employees work at the 900-acre Louisville, Ky., headquarters campus, known as Appliance Park.

Electrolux said it will continue using the GE Appliances brand under a 40-year agreement.