Midea Group Co (美的集團) is exploring a potential acquisition of Electrolux AB, people familiar with the matter said, a bold move by the Chinese home appliance giant to add the higher-end luxury Swedish brand despite potential political opposition.
Midea made a preliminary approach in the past few weeks to the white-goods manufacturer about a possible transaction, said the people, who asked not to be identified because discussions are private.
Electrolux has so far not been receptive to the proposal, some of the people said.
Photo: Reuters
Midea has been interested in Electrolux for some time and would only want a friendly deal, the people said.
Other Asian appliance makers including Samsung Electronics Co have also looked at the Swedish business, they added.
Stockholm-based Electrolux’s B shares rose almost 16 percent on Friday on better-than-expected earnings, giving it a market capitalization of US$4.3 billion. Midea shares are up about 10 percent this year, valuing it about US$58 billion.
The deal would test the Chinese company’s ability to make foreign acquisitions amid growing protectionist measures in Europe and the US, even if dishwashers and refrigerators would not necessarily be deemed a national security risk.
Buying Electrolux would add to previous overseas acquisitions by Midea. The company, which is based in Guangdong Province’s Foshan, bought a controlling stake in Toshiba Corp’s home appliance unit in 2016. It acquired German robot maker Kuka AG a year later, which triggered concerns in the German government.
Midea chairman Paul Fang (方洪波) hinted at interest in acquisitions in the US and Europe in 2017 after the firm participated in the bidding for General Electric Co’s white goods unit, which was sold to Chinese competitor Haier Group (海爾集團). Turkey’s Arcelik AS, which completed a European deal with Whirlpool Corp this year, is also a competitor.
Midea and Electrolux already have some partnerships, and in 2018 they launched the high-end AEG brand in China.
A spokesperson for Electrolux declined to comment, while representatives for Midea and Samsung could not be immediately reached for comment outside usual business hours.
Key to any deal would be getting the support from the billionaire Wallenberg family’s Investor AB, the biggest shareholder in Electrolux. There was speculation in February about Midea’s potential interest.
Electrolux is laying off 3,800 workers as it seeks to cut costs and turn around its North American business. It reported first-quarter earnings that were better than expected overall, but still showed a net loss, with analysts pointing to negative cash flow.
Midea’s net income in the first quarter increased 12 percent year-on-year to 8 billion yuan (US$1.16 billion), the company said on Friday.
It also reported net income of 29.6 billion yuan last year, missing analyst estimates.
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
Video streaming giant Netflix is launching a talent cultivation program in Taiwan aimed at producing high-quality Mandarin content, the company announced in a press release on Thursday. Netflix Chinese language content head Maya Huang (黃怡玫) said that Netflix has long invested in the Taiwanese market, citing the Netflix Fund for Creative Equity launched last year as an example. The fund would continue to dedicate resources to discovering content with the potential to be developed into Chinese-language projects, she added. The financing for the new talent projects seeks to create an ecosystem for content creators and professional development programs, she said. The talent projects
APPRECIATION: The central bank stepped in to stabilize the NT dollar after a surge in foreign institutional investment, triggered by optimism about tariffs and US Fed policy Taiwan’s foreign exchange reserves hit a record high at the end of last month, as the central bank intervened in the currency market to curb the New Taiwan dollar’s appreciation against the US dollar. Foreign exchange reserves increased by US$5.48 billion from May, reaching an all-time high of US$598.43 billion, the central bank said on Friday. While the central bank did not disclose the scale of its intervention, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said that the currency market remained relatively stable until the middle of last month. However, a shift occurred following the US Federal Reserve’s signal of a
RSS