GE to Sell Its Lightbulb Business, Shedding Last Link to Consumers -- WSJ
By Thomas Gryta and Cara Lombardo
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 28, 2020).
General Electric Co. is getting out of the business of making
lightbulbs, selling a unit that defined the company for nearly a
century and was its last direct link to consumers.
GE said it would sell its lighting business to Savant Systems
Inc., a seller of home-automation technology. Terms of the deal
weren't disclosed, but the transaction valued the unit at around
$250 million, including assumed liabilities, according to a person
familiar with the matter. The deal had an equity value of less than
$100 million, this person said.
GE had been looking to sell the business for several years. The
conglomerate once made refrigerators and microwaves as well as
bulbs but has exited those consumer businesses as part of a
yearslong restructuring. It has shifted its focus to making heavy
equipment, like power turbines, aircraft engines and hospital
GE Lighting will remain based in Cleveland, and its more than
700 employees will transfer to Savant, which will also get a
long-term license for the GE brand. GE no longer discloses revenue
for the lighting business, which it slimmed down over the
The unit traces its roots back to GE's founding 130 years ago
when Thomas Edison invented the first viable incandescent lamp. In
1935, the first Major League Baseball night game was played under
GE lights. A GE engineer invented the LED light in 1962.
For decades, GE's home appliances and lightbulbs formed a link
between American consumers and one of the country's oldest and
largest industrial companies. The company's popular TV ad campaigns
promised to "Bring good things to life," but the growth and
profitability of the consumer businesses waned.
GE got out of making television sets and small appliances like
toasters under former Chief Executive Officer Jack Welch. His
successor, Jeff Immelt, continued the shift, exiting the
NBCUniversal media business and in 2016 selling the large
appliances business to Haier Group. GE gave the Chinese buyer the
right to continue to use its brand on stoves, fridges and other
appliances for several decades as part of the deal. Thousands of
workers and a sprawling factory complex in Louisville, Ky., were
transferred in that deal.
More recently, the company has been selling off industrial units
-- such as its locomotive, oil-equipment and biopharma units. It
has used the proceeds to pare down its debts after a plunge in
profits at its power and financial-services divisions prompted the
company to slash its cash dividend to a token penny a share and
overhaul its board and executive ranks. It has also shrunk GE's
scope -- leaving the company with about 205,000 employees at the
start of 2020.
CEO Larry Culp, who took over in 2018, had depended on GE's
thriving aviation division in order to turn around the company, but
the coronavirus pandemic has crippled the airline industry. GE has
cut thousands of jobs in its aviation business and warned that a
restructuring of its large power unit could take years.
GE had previously shed its Current business, which sold
commercial lighting systems, along with parts of its overseas
lighting operations. GE's traditional bulb rivals have also scaled
back in the past decade, and many of the buyers have been Chinese
GE spent years trying to sell the lighting business, a largely
commoditized and low-margin division, before striking the deal to
sell its Current business in 2018. The company had spoken to
Chinese suitors about the lighting business, but pivoted as the
Trump administration increased scrutiny of the security risks of
selling to Chinese companies, the person familiar with the matter
The transaction is expected to close quickly, possibly within a
month, due to it being structured in a way that will limit
antitrust clearance required, this person said.
Savant, founded in 2005, is based in Hyannis, Mass. The company
specializes in smart-home systems that control features such as
lighting, entertainment, temperature and security settings all in
Robert Madonna, Savant's founder and CEO, said he plans to
maintain Savant as a premium brand and use the GE Lighting business
to sell products to the consumer market. GE Lighting already sells
smart-home lighting and switches through its "C by GE"
"Lighting is an extremely important piece of the smart home,"
Mr. Madonna said. "And you can do it at a consumer price
UBS Group AG was GE's financial adviser.
Write to Thomas Gryta at email@example.com and Cara Lombardo
(END) Dow Jones Newswires
May 28, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
General Electric (NYSE:GE)
Historical Stock Chart
From Jul 2020 to Aug 2020
General Electric (NYSE:GE)
Historical Stock Chart
From Aug 2019 to Aug 2020