Almost a fortnight after General Electric (GE) announced its intention to sell off its appliances division, it has finally disclosed possible contenders by naming Haier of China and LG of South Korea as the frontrunners. GE said this month it might sell the unit amid calls for the company to speed up divestitures of slower-growing operations.

During a breakfast meeting with businessmen in the South Korean capital, Seoul, GE CEO Jeffrey Immelt made this revelation. ''The players become very obvious,'' he said, ''its Haier in China, LG in Korea and so on. Of course, LG is one of the leading candidates.'' In addition, he cited buying interest from Mexico's Controladora Mabe, a unit of Controladora Comercial Mexicana, and Turkey's Arcelik.

Louisville, Kentucky-based GE's appliance unit had revenues of about $7 billion in 2007, around 27 per cent of the market, and is the No 2 US appliance company by volume behind Whirlpool, which was quite some distance ahead with annual sales of $18 billion last year. However, if global sales are considered, Whirlpool leads in sales of household appliances, followed by Electrolux and LG.

Sales of washers, refrigerators and other appliances accounted for more than half of last year's $13.3 billion in sales at GE Consumer & Industrial. GE had total revenue of $172.7 billion last year. More than half of the company's sales come from overseas, while the appliances division is tied to a single market, primarily in the US.

Back on 15 May, when the news broke, The Wall Street Journal had estimated a price of $5 billion to $8 billion for the unit. It was then reported that GE had hired Goldman Sachs to conduct an auction for the appliances division, adding that possible buyers could be Germany's BSH Bosch and Siemens Hausgerate, China's Haier Group, private-equity firms or Mexico-based GE partner Controladora Mabe. (See: General Electric to sell appliance business: report)

The asking price is quite high, and not many companies would be able to pay up that amount of cash, say analysts. With the current financial crisis still raging, obtaining credit is no easy proposition, they add. In addition, Japan's Hitachi and India's Videocon (See:Videocon weighs probable bid for GE's appliance business) had also been mentioned as possible buyers, although the former subsequently denied any interest (See: Hitachi president rules out buying GE's appliances unit). Sweden's Electrolux and Korea's Samsung have also featured in several analyses.

Immediately after Immelt's disclosure, the Korea Stock Exchange requested clarification from LG Electronics about its intentions regarding the bidding process. LG hasn't decided whether to bid for the GE unit, the company said today in response to the query. LG is ''carefully monitoring'' the sale of GE's appliances division, CEO Nam Yong said. Zhao Rui, a spokeswoman at Haier, declined to comment.

With its own appliances division netting $11.3 billion in global revenues last year, LG may find it more palatable financially to close the deal than Chinese rival Haier.

On the other hand, Haier, which posted annual revenue of $4.8 billion for its Shanghai-listed appliance-making Qingdao Haier, can count on state support from China's national banks for the acquisition as well as Western private equity players. It may have already spoken to China Development Bank for possible financing of a bid.

It was in a similar manner that China's Lenovo had successfully engineered a highly leveraged acquisition of IBM's personal computer division for $350 million in 2005, making it the fourth-largest computer maker in the world.

While LG will be looking to expand its considerable presence in the American market and challenge Whirlpool's global superiority, Haier is looking to make a notable entry in the US piggybacking on a household name. In fact, it had recently bid unsuccessfully, in partnership with the Blackstone Group and Bain Capital, for Iowa-based Maytag in 2006 but lost out to Whirlpool.

Both would benefit from this acquisition and their executives have publicly expressed interest in the sale.

GE rose to $30.58 in early US trading. The shares closed at $30.40 yesterday in New York Stock Exchange composite trading and have declined 18 percent so far this year and 7 percent this month.

LG Electronics shares fell 3.6 percent to close at 134,000 won in Seoul. The stock has declined 14 percent this month. Haier Electronics closed unchanged at HK$1.2 in Hong Kong trading and has declined 28 percent so far this year and is up 1.7 percent this month.