October 25, 2014

Electrolux Still Entertaining Daewoo Purchase

Electrolux may be behind your next Daewoo purchase.

Electrolux is interested in buying Daewoo Electronics Corp. should the takeover of the bankrupt South Korean appliance maker by an Iranian rival fall through, Chief Executive Officer Keith McLoughlin said.

According to businessweek.com, creditors of Daewoo Electronics 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 regulatory filing.

“If they come back to us, we’ll certainly talk to them,” McLoughlin said in a Feb. 17 interview at the Stockholm-based company’s headquarters. “They knew we were interested, and we’re still interested. If the phone rings, we’ll answer it.”

McLoughlin, who took the helm at the world’s second-biggest home appliance maker 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.

Daewoo Sale

(Reuters) Creditors of South Korea’s Daewoo Electronics have chosen five candidates including Electrolux (ELUXb.ST) and Ripplewood to buy the appliance maker in a preliminary bidding, a local media report said.

It is the fourth attempt to sell creditors-owned Daewoo Electronics, once a flagship of the failed Daewoo Group.

MoneyToday said that Daewoo’s creditors shortlisted five viable candidates among those who submitted letters of intent — Sweden’s appliance giant Electrolux, U.S. private equity firm Ripplewood Holdings, South Korean cooking appliance maker Tong Yang Magic (023020.KQ), a Middle East firm and an appliance player in Mexico.

An official at Daewoo’s leading creditor Woori Bank confirmed creditors had received multiple letters of intent but declined to identify any preliminary bidder. The final bidding will take place in March, MoneyToday said, citing industry sources.

After earlier sale attempts had failed, Daewoo Electronics sold off its non-core businesses to focus on its profitable washing machines and refrigerators businesses.

In the previous rounds, Ripplewood was the latest contender but talks with the U.S. firm collapsed in January in the aftermath of the global financial crisis.

Prior to that, creditors also held failed negotiations with a consortium of India’s Videocon Industries (VEDI.BO) and RHJ International (RHJI.BR), the holding company for Ripplewood, as well as a private equity unit of Morgan Stanley (MS.N).

Unlisted Daewoo was placed under a debt rescheduling program after its parent group went bankrupt in 1999. It competes with bigger local rivals Samsung Electronics (005930.KS) and LG Electronics (066570.KS) as well as low-priced Chinese producers, and generates more than 80 percent of its sales abroad