China’s Midea considering acquisition of Electrolux despite potential political opposition
- Midea has been interested in Electrolux for some time and would only want a friendly deal, but Electrolux has so far not been receptive to the proposal
- On Friday, Electrolux’s shares rose on upbeat earnings, lifting its market capitalisation to US$4.3 billion while Midea’s shares value it at US$58 billion
Midea Group Co. is exploring a potential acquisition of Electrolux AB, according to people familiar with the matter, 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 recent weeks to the white-goods manufacturer about a potential deal, 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.
Midea has been interested in Electrolux for some time and would only want a friendly deal, the people said. Other Asian appliance makers have also looked at the Swedish business, the people added.
Electrolux’s B shares jumped almost 16% Friday on better-than-expected earnings, giving it a market capitalisation of US$4.3 billion. Midea shares are up about 10% this year, valuing it around 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 wouldn’t necessarily be deemed a national security risk.
