GE said the deal values the appliance business at 10 times last 12 months earnings before interest, taxes, depreciation, and amortization (EBITDA).

The acquisition of GE Appliances is an important investment in expanding Haier’s presence in the USA and in the Western hemisphere, says the statement.

As part of the deal, Haier gets to keep using the GE Appliances name, something GE hopes will grow the overall brand in China.

Speaking to reporters Friday morning after Haier Group said it would buy General Electric’s Louisville-based appliance division, Louisville Mayor Greg Fischer paused to repeat an important point.

GE had been running an auction for the century-old appliance business since it abandoned a $US3.3 billion sale to Sweden’s Electrolux in December.

GE had previously been due to sell the unit to Swedish rival manufacturer Electrolux for $3.3 billion, but the deal ran into opposition from USA competition authorities.

General Electric needed a fresh buyer to acquire its appliance business after demand for appliances in the U.S. continue to rise.

A combination of GE and Electrolux would have united two of the biggest appliance makers and created a company on par with Whirlpool Corp., which has roughly a third of the US market.

It will be subject to “customary regulatory filings in China and antitrust approvals in the US, Mexico and Argentina”, said a person authorized to speak on behalf of Qingdao Haier. The acquisition will let Haier vault over Panasonic and Procter & Gamble into fifth place.

Additionally, Qingdao Haier is not the only company to have spotted the opportunity in emerging markets; it will have to fight hard for market share. Already one of the world’s largest appliances makers, it wants to expand outside its own region and boost its 1.1 percent share of the US market.

Haier was the first Chinese company to establish manufacturing operations in the US.

As GE transforms itself into a tech company in the vein of Google or Intel, it will build a partnership with Haier to explore opportunities in the fields of industrial Internet, health care and advanced manufacturing. He added that his company Haier was committed to investing within the U.S.

Goldman Sachs was GE’s financial adviser and Sidley Austin LLP was its legal adviser. The GE-Electrolux deal left unanswered questions about how many jobs would be left in Louisville, leading to concern among the local workforce.

The company has already rolled out smart appliances such as heaters you can turn on with your mobile phone and washing machines that adjust their cleaning functions according to clothing load.