Six years after a failed attempt to sell the business division responsible for inventing the electric toaster back in 1905, General Electric is reportedly looking again to negotiate a deal. The division, GE Appliances and Lighting, has brought many modern conveniences forward, including refrigerators, washing machines and stoves, as readers may know.

The appliances and lighting unit is not a business flop, by any means, having generated over $8 billion in sales in 2013. While that is nothing to sneeze at, it accounted for only 5.6 percent of the company’s total sales. The unit promises to go for as much as $2.5 billion, it is estimated. The idea behind the sale is to get out of areas of business in which the company is not at the front of the pack, so to speak. 

In that sense, the plan to sell the appliances and lighting unit is part of a larger business strategy to ensure the company’s long term success. In recent years, the company has been moving toward more of a focus on industrial units.

When it comes to business sales, companies have to give a lot of careful thought not only to their long term business goals, but also to the best way to accomplish those goals. Pruning parts of a company that aren’t as productive is one way to do this. In terms ofbusiness sales, it is important for companies to ensure that they have an advocate throughout the negotiation process. A good advocate can help structure a deal so that it is takes into account the immediate interests of the company as well as the company’s long term goals.  

Source: Bloomberg, “GE in Talks With Suitors to Sell Iconic Appliances Business,” David Welch and Richard Clough, July 16, 2014.