Chinese appliance manufacturer Midea is believed to have made a multibillion dollar bid for Swedish appliance manufacturer Electrolux who also sell Kelvinator, Dishlex and Simpson appliances in Australia, along with Vintec Wine fridges, and Beefeater barbecues, Electrolux also own AEG Appliances.

Shares in the Company that is currently laying off staff believed to be over 3,500 surged 10% on the news.

Last quarter Midea one of the world’s largest appliance Companies, had revenues of US$1.2 Billion. The bid has been valued at A$6.6 billion.

Bloomberg claims that Midea made a preliminary takeover approach in recent weeks and that Electrolux has so far not been receptive to the proposal.

At this stage the Company is refusing to comment on the bid.

Sources claim that Midea has been interested in Electrolux for some time and would only want a friendly deal on terms acceptable to both Companies.

Traditionally Chinese Companies replace local management with Chinese executives as happened with Asko another Swedish appliance Company that was acquired by Hisense.

ChannelNews understands that Samsung Electronics have also run a ruler over the Swedish business in recent months.

, Midea which is based in Foshan in Guangdong province, bought a controlling stake in Toshiba’s home appliance unit in 2016.

Bloomberg claims that Midea Chairman Paul Fang hinted at interest in acquisitions in America and Europe in 2017 after the firm participated in the bidding for General Electric Co.’s white goods unit, which was sold to Chinese competitor Haier Group.

Turkey’s Arçelik, which did a European deal with Whirlpool this year, is also a competitor.

Midea and Electrolux already have some partnerships, and in 2018 they launched the high-end AEG brand in China together.
Key to any deal would be getting the support from the billionaire Wallenberg family’s Investor AB, the biggest shareholder in Electrolux. There was speculation in February about Midea’s potential interest.

“For Midea, we still believe Electrolux could make an excellent addition to its business,” DNB Markets analyst Christer Magnergård wrote in a note. But it would be “politically challenging” for Investor to agree to a sale, “as well as unlikely from a timing perspective given the current relatively depressed share price, in combination with Investor’s circa 70-year ownership in the company.”

Spokespeople for Electrolux and Investor declined to comment, while representatives for Midea and Samsung couldn’t be immediately reached for comment outside usual business hours.

Electrolux is in the process of laying off 3,800 workers as it seeks to cut costs and turn around its North American business. It reported first-quarter earnings that were better than expected overall, but still showed a net loss, with analysts pointing to negative cash flow.