Chinese home appliance manufacturer Midea is exploring a potential acquisition of the Swedish home appliance brand Electrolux despite possible political opposition, which has prompted a more than six percent jump in Electrolux’s stock price on European exchanges on Tuesday.
Midea has established preliminary contact in recent weeks with representatives of the Swedish company regarding a possible takeover, sources familiar with the matter told Bloomberg. Electrolux has not yet accepted the proposal, they added.
The Chinese company has been interested in Electrolux for some time and would prefer an exclusively friendly agreement. Other Asian home appliance manufacturers, including South Korea’s Samsung Electronics, have also been eyeing the Swedish company.
Electrolux’s market capitalization was $4.3 billion at the end of last week, while Midea’s was around $58 billion.
Any potential acquisition agreement will test a Chinese company’s ability to execute a foreign acquisition amid rising protectionism in Europe and the U.S., despite the fact that dishwashers and refrigerators would not necessarily be considered a national security risk.
By acquiring Electrolux, Midea would only add to its list of foreign acquisitions. The Chinese company, based in Foshan in Guangdong province, acquired a controlling stake in the home appliance division of Japan’s Toshiba in 2016, and a year later, the German robotics manufacturer Kuka, which raised concerns in the German government.
