Hong Kong: China’s Haier Group agreed to buy General Electric Co.’s (GE’s) appliance business for $5.4 billion in what would be the country’s biggest acquisition of an overseas electronics company.

The group’s Qingdao Haier Co. signed an agreement with GE and the transaction is targeted to close in mid-2016, according to a statement. While the boards of GE and Haier have approved the deal, it’s still subject to shareholder and regulatory approval, it said.

Buying a century-old business that makes $8,500 refrigerators from the likes of GE would underscore the rise of a Chinese company once known for making cheap fridges for college dormitories. It also highlights Haier’s global ambitions as the acquisition would help the company expand in the US, one the markets it’s trying to focus on besides Europe and Japan.

“It may be a step for the Chinese company to build up an international network, while its overseas exposure now is still small," Andrew Song, an analyst in Guotai Junan Securities Co., before the announcement. “It’s also likely that they will have more synergy as Haier is developing smart appliances."

If completed, the size of the deal would make it the largest Chinese purchase of an electronics business overseas, surpassing state-backed Tsinghua Holdings Co.’s plans for a $3.8 billion investment in Western Digital Corp. announced last year and Lenovo Group Ltd’s $2.8 billion acquisition of Motorola Mobility Group in 2014, according to data compiled by Bloomberg.

GE was seeking another suitor for the unit after an agreement with Electrolux AB collapsed following opposition from the US justice department. The business drew offers from suitors including China’s Midea Group Co., people with knowledge of the matter said in January.

The sale is part of GE chief executive officer Jeffrey Immelt’s efforts to reshape the company around industrial-manufacturing operations. Besides the appliance business, he’s selling the bulk of GE’s lending arm, while expanding divisions making products such as gas turbines, oilfield equipment and jet engines.

Midea is China’s biggest manufacturer of appliances, with a 17.1% share of the country’s market in 2015, followed by Qingdao Haier with 7.9%, Euromonitor International data show. Haier had a 1.1% share of the US appliance market last year, according to Euromonitor.

GE and Haier also announced on Friday they will cooperate in industrial internet, healthcare and advanced manufacturing. Both companies will also work together to develop and grow affordable consumer health initiatives in China, according to the statement. Bloomberg

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