Electrolux is still interested in buying Daewoo according to reports today, should the takeover of the bankrupt South Korean appliance maker by an Iranian rival fall through, Chief Executive Officer Keith McLoughlin said.
Creditors of Daewoo last year agreed to an offer from Entekhab Industrial Group over a competing one from Electrolux. Lenders have since extended the deadline for Entekhab to pay the 471.5 billion won ($420 million) price tag until April 7. Daewoo Electronics had sales of 1.13 trillion won in 2009, according to the latest available information.
“If they come back to us, we’ll certainly talk to them,” McLoughlin said in an interview at Electrolux’s company headquarters on February 17th. “They knew we were interested, and we’re still interested. If the phone rings, we’ll answer it.”
McLoughlin, who took the helm at Electrolux at the start of this year, said talks are under way with “more than a couple” potential takeover targets. These may include companies that make air conditioners and other “adjacent products” to Electrolux’s vacuum cleaners, washing machines and refrigerators, he said.
Electrolux’s shares have fallen 16 percent this year, valuing the Stockholm-based business at 50 billion kronor ($7.8 billion. That compares with a 6.1 percent slide at bigger rival Whirlpool Corp.
Negotiations to buy a 52 percent stake in Egypt’s Olympic Group Financial Investments remain on hold following political unrest in the country, yet the asset is still of interest to Electrolux, the CEO said.
Purchases in South Korea and Egypt would be part of Electrolux’s strategy to expand in fast-growing markets. Sales in Asia Pacific and Latin America helped counter a slowdown in volumes in Europe and North America in the fourth quarter.
Under former CEO Hans Straaberg, Electrolux largely refrained from acquisitions as it focused on cutting costs by moving most production to low-wage countries. The company last August agreed to buy a washing-machine manufacturer in the Ukraine for 19 million euros ($25 million).
Buying Egypt’s Olympic Group still has the potential to create value, McLoughlin said.
“We’ve got one huge caveat, which is the whole country went to turmoil since we announced this,” the CEO said. “Our intention would be to go forward as soon as there’s an orderly transition” of the regime.
Electrolux continues to discuss the conditions of the deal, McLoughlin said.
“Obviously we’re going to consider what’s happening in the marketplace as we talk to the sellers,” the CEO said. “We need to have those discussions with them and comprehend the current market conditions.”
