A modern kitchen featuring GE's Slate appliances. Source: General Electric.

After nearly a century of manufacturing refrigerators for your kitchen, General Electric (NYSE:GE) is saying goodbye to its appliances business. On Monday, GE signed a deal to sell its iconic line of refrigerators, dishwashers, and other household appliances to Sweden's Electrolux for $3.3 billion in cash.

For Electrolux, the move looks savvy: It could nearly double the company's appliance sales in North America right off the bat. For GE, however, it means the loss of an iconic brand and some of its last consumer-facing products as it pivots toward an industrial-focused future.

Did GE make the right move for shareholders? Let's take a closer look.

Why GE turned off its appliances
GE decided it was no longer interested in manufacturing refrigerators for three key reasons: The appliances business was relatively tiny and stagnant, the profits were meager, and GE wants to power the world rather than heat your tea kettle.

For starters, GE Appliances and Lighting represented only a tiny sliver of the company's top- and bottom-line results. Over the last three years, this segment contributed only 5% of total revenue and 1% of total segment profits during that stretch for GE. And the growth prospects are not too savory, either: In 2012 and 2013, the Appliances and Lighting segment grew a measly 5% and 4%, respectively. GE's appliances business was akin to the produce hidden in the back of your refrigerator -- after a while, you tend to forget it's even there.

GE's Artistry series kitchen appliances. In its latest deal, GE reached a long-term agreement that allows Electrolux to continue using the GE brand. Source: General Electric.

Second, the margins in Appliances and Lighting were razor-thin relative to GE's industrial-focused segments. In 2012 and 2013, for example, profit margins in GE's Appliances and Lighting business were a mere 3.9% and 4.6%, respectively. Meanwhile, overall segment profit margins were more than three times as hearty, at 15.1% in 2012 and 15.7% in 2013. At the end of the day, the juice just wasn't worth the squeeze. Now, GE can redeploy the cash from the Appliances spinoff in areas of the business that earn a higher return on investment.

Finally, appliances weren't exactly setting the world on fire for GE. As it spelled out in its letter to shareholders in 2011, GE aims to work on "innovations that build, power, move and help cure the world." CEO Jeff Immelt went on to say, "We make things that very few in the world can, but that everyone needs."

Ovens and dishwashers, quite frankly, just don't fit that bill. In large part, the appliance industry was commoditized and (in many cases) outsourced decades ago. Plenty of capable manufacturers, including Electrolux, Frigidaire, LG, and Whirlpool, make electrical appliances. Only a select few manufacturers like GE and Siemens, however, can make the massive gas turbines that generate electricity to power those appliances. That's the type of market in which GE wants to compete.

The profit margins for GE's turbines tower above those in its appliances business. Source: General Electric.

Is this a smart move for shareholders?
What's particularly interesting about GE's spinoff is that it flies in the face of a recent trend in the world of deal-making: More and more companies are seeking deals that meet what Google's Larry Page calls the "toothbrush test," which means they want products that customers will use twice daily.

Many of GE's appliances meet this test, of course, yet GE wants no part of this business. This means GE is less concerned about consumer goods and more focused on building its brand in the eyes of private- and public-sector customers. Secondly, it implies that GE probably doesn't see appliances becoming a very interesting part of the so-called "smart home."

And, finally, it shows that GE is dead serious about becoming a company driven by industrial earnings rather than banking. It all started with the Alstom deal and the Synchrony spinoff during the summer. GE's latest spinoff provides further evidence that it is sticking to its guns and reinventing itself as an industrial powerhouse.

As I've noted before, this change of direction is good news for shareholders. The more the market perceives GE as an industrial company first and a bank second, the more investors are willing to pay a premium for growth. And that bodes well for GE's shares, which currently trade at a 10% earnings discount relative to its industry peers.