This story has been updated from 8:10 am EDT with additional information and analysts' comments.
NEW YORK (TheStreet) -- Shares of General Electric (GE) were slightly higher on Monday after it was reported that Electrolux (ELUXY) would buy GE's appliances business for $3.3 billion in cash to double sales in North America and take on rival Whirlpool (WHR) in its biggest ever deal.
To help finance the takeover, Stockholm-based Electrolux said it would soon launch an $830 million rights issue, according to The Deal. The duo just under a month ago confirmed they were in talks on the division, which GE first tried to sell five years ago. Electrolux said it can squeeze "significant synergies" out of the union by getting better prices on parts and eliminating overlapping administrative functions.
"It's an attractive strategic fit for us ... very complementary products, brands, channels, distribution," CEO Keith McLoughlin told TheStreet on Monday, adding that there are substantial synergies available.
"The GE appliance brand is very well recognized" by U.S. consumers, he added. "It's a good brand to have in the portfolio."
Electrolux CEO Keith McLoughlin talks to TheStreet's Ruben Ramirez about the deal:
Brian Langenberg, Langenberg & Co. (Buy; $28 PT)
We are underwhelmed with the $3.3 billion price tag, which is leaving about $2 billion in value on the table. "Strengthening" the business from awful to poor is not a win. Years of neglect allowed margin to deteriorate from 12% to nil then back to 5-6%. Getting EBIT (not EBITDA, EBIT) back to $650-750 million would drive cash flow and a better exist price.
We would prefer to see a) fix EBIT margin - hit at least 10%, b) await/capture at least 15% cumulative revenue growth next 2-3 years then c) sell for 75-90% of revenue and pocket $4.8 - 6.0 billion.
TheStreet Ratings team rates GENERAL ELECTRIC CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL ELECTRIC CO (GE) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
You can view the full analysis from the report here: GE Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE