Now this article really is a surprise and one I never thought I would be writing but, it is being mooted that Electrolux, the world’s second largest appliance manufacturer could be ripe for a takeover according to a Wall Street Journal article.
And, around the same time, rumours from Italian news AGI, speculates a merger with, of all people, Indesit and Electrolux. This is allegedly serious. AGI reports that when answering journalists asking for an opinion on former Electrolux manager and PDL Senator Maurizio Castro concerning a merger wit Indesit , Labour Minister Maurizio Sacconi said, “We will analyse the Electrolux Group’s industrial plan without excluding possible synergies that would be useful for ensuring greater production in Italy.”
Electrolux is currently negotiating with trade unions over the dismissal of 800 employees, and the government has summoned both parties for February 24 in Rome.
So, it’s serious enough a rumour to get the attention of the Italian government but it’s also difficult to see how any merger between two of the largest appliance makers in Europe could sneak past the monopoly regulators. But, time will tell.
Meanwhile, over in the Wall Street Journal journalist Sven Grundberg speculates that Electrolux could be ripe for a takeover bid from some form of private equity partnership and, if Electrolux doesn’t watch out that may well happen.
Handelsbanken analyst Rasmus Engberg noted that Electrolux is starting to look, “like a sitting duck,” ripe for takeover by some private equity company.
Ordinarily rumours like this get brushed to one side as being, well, preposterous for the most part but there does seem to be some legs to this one.
Grunberg writes that, “For sure, a reasonably well-run company that has lost 17% of its market value year-to-date and has gone through many years of painful restructuring while sitting on a mountain of cash, would indeed prompt interest from prospective bidders.”
Maybe this story will fly after all as it looks as if Electrolux is trying to protect itself through acquisitions of the the now faltered deals to buy Egypt’s Olympic Group and Daewoo. Although to be fair, it looks as if the Daewoo deal may not be dead as the current winning bidder, Iran’s Entekhab Industrial Group, seems to have run out of cash to pay for the buy.