Electrolux Acquires Chilean Appliance Company CTI

STOCKHOLM--()--Regulatory News:

As a part of its strategy to grow in emerging markets, Electrolux (STO:ELUXA)(STO:ELUXB) will acquire Sigdo Koppers’ controlling stake in Compañia Tecno Industrial S.A (CTI). The acquisition makes Electrolux the largest supplier of appliances in Chile and Argentina, and further enhances Electrolux position as a leading appliance company in the fast-growing Latin American market.

Sigdo Koppers and certain associated parties have agreed to sell their controlling interest in CTI to Electrolux, corresponding to approximately 64% of the outstanding shares. CTI is listed on the Santiago Stock Exchange. Under the terms of the agreement, Electrolux will commence a cash tender offer to acquire 100% of the outstanding shares in CTI at a price of 34.87 Chilean Pesos (CLP) per share with Sigdo Koppers and certain associated parties committed to tender their 64% stake.

Electrolux will also commence a cash tender offer to acquire all of the outstanding shares of CTI’s subsidiary, Somela, also listed on the Santiago Stock Exchange, for CLP 325 per share, with CTI committed to tender its 78.5% stake. CTI’s net income from the sale of its shares in Somela will be distributed to its shareholders through a pre-closing dividend of CLP 4.39 per share.

As part of the transaction, CTI will also pay a pre-closing dividend to its shareholders based on its net income for the first half of 2011, of CLP 1.63 per share. In total CTI’s shareholders will receive CLP 40.90 per share. The implied enterprise value for CTI and its subsidiaries, corresponds to approximately SEK 4.4 billion (CLP 318 billion). The tender offers are expected to commence within ten business days from the signing of the agreement yesterday.

In Chile, CTI manufactures refrigerators, stoves, washing machines and heaters, sold under the brands Fensa and Mademsa, and it is the leading manufacturer with a volume market share of 36%.Through its wholly-owned subsidiary Frimetal, it also holds a leading position in Argentina with the GAFA brand. Somela is the largest supplier of small domestic appliances in Chile.

In 2010, CTI generated consolidated sales of CLP 203 billion (approximately SEK 2.9 billion) and an operating income (EBIT) of CLP 32 billion (approximately SEK 450 million), corresponding to a margin of 16% and a net profit of CLP 23 billion (approximately SEK 330 million). CTI has 1,200 employees and two manufacturing sites in Chile and one site in Argentina.

“This acquisition builds on the strengths of Electrolux and CTI and provides significant growth opportunities that would be difficult to achieve by either company individually. Together we will generate significant revenue synergies and cost synergies relating to purchasing and production,” says Keith McLoughlin, President and CEO of Electrolux. “Latin America is important to our growth plans and we believe there will be a successful path ahead for the combined forces of Electrolux and CTI.”

“Electrolux has very strong roots in Latin America, and we have been partners with CTI in certain Latin American markets for the past 15 years. We are committed to the strong brands of CTI, which are aimed at segments of the market that are complementary to those of Electrolux,” says Ruy Hirschheimer, President of Electrolux Major Appliances Latin America.

Telephone conference

The acquisition of the Chilean appliance company CTI will be presented at a telephone conference today. The telephone conference will start at 16.00 CET and continue until 16.30 CET.

The conference will be chaired by Keith McLoughlin, President and CEO of Electrolux. Mr. McLoughlin will be accompanied by Jonas Samuelson, CFO and COO as well as Peter Nyquist, SVP IR and Financial Information.

Slides used in the presentation and the webcast will be available at Electrolux website, www.electrolux.com.

Details for participation by telephone

The details for participation by telephone are as follows:

Participants in Sweden should call +46 (0)8 505 598 53.

Participants in UK/Europe should call +44 (0)20 3043 2436.

Participants in US should call +1 866 458 4087.

More information on CTI is available at www.sigdokoppers.cl/english/areas_negocios/area_de_negocios_industrial_02.html.

Electrolux discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act.

Electrolux is a global leader in household appliances and appliances for professional use, selling more than 40 million products to customers in more than 150 markets every year. The company focuses on innovative products that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, cookers, air-conditioners and small appliances such as vacuum cleaners sold under esteemed brands like Electrolux, AEG, Eureka and Frigidaire. In 2010 Electrolux had sales of SEK 106 billion and 52,000 employees. For more information, go to www.electrolux.com/press and www.electrolux.com/news.

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Contacts

Electrolux Press Hotline
+46 8 657 65 07

Contacts

Electrolux Press Hotline
+46 8 657 65 07