Visitors look at electric home appliances of Haier during an expo in Qingdao city, East China's Shandong province, July 10, 2015. [Photo/IC]

Haier Group, China's biggest manufacturer of household appliances, agreed to buy General Electric Co's appliances business for $5.4 billion in cash in the country's biggest acquisition of an overseas electronics company.

Qingdao-based Haier signed a memorandum of understanding on Friday with GE in the United States, according to a statement by Haier. The deal is expected to be completed in the second quarter of this year, pending regulatory approval.

The statement said the operation team at GE's appliances unit will remain unchanged. Haier is authorized to use GE's brand for at least 40 years.

In 2014, GE announced that it planned to sell its century-old appliances units to Electrolux AB, the Swedish appliance maker, for $3.3 billion. However, the deal collapsed last month because of opposition from the US Justice Department, forcing the US electronics giant to seek another buyer.

Haier and another Chinese home appliance company, Guangdong-based Midea Group, are among suitors that submitted bids for GE's home appliances business.

Zhang Yanbin, assistant director of All View Cloud, a Beijing consultancy specializing in home appliances, said that if the transaction is completed, it will be the largest acquisition by a domestic appliance maker in an overseas market.

"It is inspiring news for the Chinese home appliances industry, and the acquisition, which includes manufacturing, research and development, marketing and other links of GE's appliance unit, would help Haier expand in the US market. It is a deep cooperation for both sides," said Zhang.

The Chinese home appliances market is almost saturated, so domestic makers are looking overseas to find new business growth points.

With a 10.2 percent market share, Haier was the world's largest household appliances brand in 2014 for the sixth straight year, according to Euromonitor, a market research company in London.

The deal, which will be funded through Haier's capital and loans, will need anti-trust approval from authorities in the US, Mexico, Canada and Colombia.

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