Midea Group Company is exploring a potential acquisition of Electrolux, say sources, 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 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 said.
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 have also looked at the Swedish business.
Stockholm-based Electrolux's B shares jumped almost 16 percent on Friday on better-than-expected earnings, giving it a market capitalization of US$4.3 billion (HK$33.5 billion). Midea shares are up about 10 percent this year, valuing it at 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 wouldn't necessarily be deemed a national security risk.
Buying Electrolux would add to previous overseas acquisitions by Midea. The company, which is based in Foshan in Guangdong province, 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.
Key to any deal would be getting support from the billionaire Wallenberg family's Investor, the biggest shareholder in Electrolux.
