LG Elec watching GE appliance unit sale plans: CEO

By Marie-France Han

SEOUL (Reuters) -- The chief executive of LG Electronics (066570.KS) said on Tuesday the company was closely watching developments surrounding the potential sale of General Electric Co.'s (GE.N) appliance unit, but declined to say more.

General Electric confirmed this month it may sell or spin off its century-old appliances division, which last year generated revenue of $7.2 billion.

The unit is estimated by analysts to be worth $4 billion to $8 billion. LG, the world's top maker of household air conditioners, has been talked about as a potential suitor, along with China's Haier Group.

"(The planned sale) has the potential to change the structure of the world's appliance industry," Nam Yong, chief executive officer of LG Electronics told a news conference aimed at unveiling a business portfolio revamp over the next five years.

Nam added he had no plans to meet with GE CEO Jeffrey Immelt, who is visiting South Korea.

The LG reorganization process will include withdrawing from some areas, expanding outsourcing and entering new businesses related to energy, the environment and healthcare.

Nam declined to specify which areas LG was planning to withdraw from. Decisions would affect businesses generating no profit or showing no prospect of entering the world top 3 by 2010.

Nam said LG had no intention of abandoning its ailing plasma screen business as long as it was cash-flow positive. He added, however, that LG would not be making any significant capacity investment into plasmas.