GE sells appliances business to China's Haier for $5.4bn

General Electric has agreed to sell its appliances business to Chinese appliance maker Qingdao Haier for $5.4bn (£3.8bn).

The transaction, which has been approved by both companies’ boards of directors, is targeted to close mid-2016.

It values GE Appliances at 10x the last 12 months of earnings before interest, taxes, depreciation and amortisation and the company expects the sale to generate an after-tax gain of around $0.20 per share at closing. GE said this will be offset with restructuring this year.

GE chairman and chief executive officer Jeff Immelt said: “We are pleased to be selling our appliances business to Haier, which is committed to growing the business globally.

“GE Appliances is performing well and there was significant interest from potential buyers, helping drive a good deal which will benefit our investors, customers and employees.”

As part of the deal, Haier will continue to use GE Appliances’ brand.

The companies also announced a long-term strategic partnership that will see them cooperate in areas such as industrial internet, healthcare and advance manufacturing.