Chinese company wants to buy Electrolux

Gadget Technology

Tuesday, May 2, 2023 06:56 (GMT+7)
06:56 5/2/2023

Midea is looking to acquire high-end electronics company Electrolux, but the Swedish company is reluctant to accept the offer.

Electrolux home appliances in a store in North Carolina (USA). Photo: Bloomberg .

Bloomberg sources said that the home appliance manufacturer Midea is planning to buy Electrolux, this is a bold move by the Chinese corporation to own the high-end electronics brand from Sweden.

Midea is said to have approached Electrolux to negotiate a deal in recent weeks. The Swedish electronics company has not responded yet.

Sources said some Asian electronics companies such as Samsung Electronics are also considering the possibility of acquiring Electrolux.

For Midea, the group wants the deal to go smoothly in a friendly deal, approved by Electrolux's board of directors.

Electrolux's B-shares rose nearly 16% on April 28, giving it a market capitalization of about $4.3 billion thanks to better-than-expected first-quarter results. Meanwhile, Midea shares have risen about 10% since the beginning of the year, giving it a market capitalization of about $58 billion .

Midea and Electrolux collaborated to launch the premium home appliance brand AEG in China in 2018.

According to Bloomberg , the Midea deal will test the ability of Chinese companies to acquire foreign businesses amid geopolitical tensions in Europe and the US. This is expected to be difficult, although dishwashers and refrigerators are not necessarily classified as national security risks.

A Midea store in Guangzhou. Photo: Bloomberg .

This is not Midea’s first overseas deal. In 2016, the Guangdong-based company bought a controlling stake in Toshiba. A year later, Midea acquired German robot maker Kuka, raising concerns among the German government .

An Electrolux spokesman declined to comment, while representatives for Midea and Samsung did not respond. The turning point in the deal may come from the Wallenberg family's investment firm Investor AB, the largest shareholder in Electrolux.

Electrolux is laying off about 3,800 employees as it seeks to cut costs and restructure its North American operations. Despite better-than-expected first-quarter results, the company still posted a net loss and negative cash flow.

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