General Electric is considering putting its appliances unit up for sale in a move that could raise some $7bn and sever its century-long links with one of its oldest businesses.

People close to the situation said the US conglomerate had held talks with investment banks with a view to hire one of them to solicit bids for the business, which had sales of $7.2bn last year.

However, people familiar with the situation said no final decision on whether to sell the appliances business, which has been part of GE since the early 1900s, had been made.

The decision to consider a sale of the appliances unit, whose products range from toasters to ovens and fridges, underlines the desire by Jeffrey Immelt, chairman and chief executive, to boost earnings by investing in high-margin businesses.

Mr Immelt is under pressure to improve GE’s results after the company shocked the market with first-quarter results that were well below analysts’ expectations last month. Its shares have lost more than 15 per cent since early April.

The appliances division, which pioneered the electric toaster in 1905, has been plagued by low margins and slim profitability and has long been seen as a candidate for disposal.

However, Mr Immelt had repeatedly maintained that the division was valuable to the locomotives-to-medical systems conglomerate because it was one of its few businesses with a well-known consumer brand.

GE officials had also said the unit, which has its headquarters in Kentucky, generated a healthy cash flow that could be invested in higher-growth businesses.

But after the profit miss in the first quarter, Mr Immelt needs to improve earnings and margins to meet his long-term target of 10 per cent annual earnings growth and allay investors’ fears over the company’s strategic direction. People close to the situation said Goldman Sachs was the front-runner to handle the auction if GE decided to go ahead with the sale.

Goldman declined to comment. Analysts said that potential buyers could include Chinese, South Korean and Indian companies eager to buy a well-known brands such as GE and Hotpoint and acquire a large distribution system in the US and other countries. Private equity groups could also be interested as the business has a strong cash flow.