April 23 (Reuters) - Swedish appliance maker Electrolux said on Thursday it would launch a 9 billion Swedish crown ($976.34 million)rights issue and unveiled a tie-up with China's Midea Group to form
Electrolux plans about $1 billion share issue, tie-up with Midea in North America to shake up ops
Electrolux's Strategic Moves and Financial Restructuring
By Kanjyik Ghosh and Greta Rosen Fondahn
April 23 (Reuters) - Swedish appliance maker Electrolux said on Thursday it would launch a 9 billion Swedish crown ($976.34 million) rights issue and unveiled a tie-up with rival Chinese Midea Group in North America to form three joint ventures as it restructures its operations.
Details of the Joint Ventures
One of the joint ventures will sell food preservation products for North America, a second JV will operate a food preservation factory in Mexico, and a third will operate a factory in South Carolina as a fabric care unit, Electrolux said in a statement.
Funding and Restructuring Plans
The funds raised from the rights issue would be used to partly fund the joint ventures and to carry out other restructuring measures across its operations.
Financial Impact and Asset Sales
The appliance maker said it expects to report total negative non-recurring items (NRIs) of approximately 2.4 billion Swedish crowns in the second quarter of 2026 as a result of the partnership, of which approximately SEK 0.9 billion will have a cash impact.
Electrolux expects to sell some assets in Mexico in the third quarter of 2026 and that is expected to generate positive cash flow of approximately SEK 1.0 billion, it added.
Performance of North American Operations
Its North American business, which represents around a third of sales and which struggled for years with high costs, underperformance at its factories and tough competition and has undergone a series of attempted drastic restructurings with limited results.
Recent Financial Results
The firm also reported net sales for the first quarter of 2026 of around 30 billion Swedish crowns, down from 32.58 billion crowns a year ago.
The company said its operating income (excluding non-recurring items) in the first quarter came in around 200 million crowns, with the North America operations posting a loss of 900 million Swedish crowns.
Analysts, on average, had forecast an operating profit excluding non-recurring items for the group of 781 million Swedish crowns for the first quarter, according to a poll provided by Electrolux.
Outlook and Market Response
The firm on Thursday, however, left its outlook for 2026 unchanged. Electrolux has been restructuring, cutting costs and putting focus on more premium categories to lift profitability in the face of weak consumer demand and competition from lower-priced rivals.
Shares rose 2.8%.
($1 = 9.2181 Swedish crowns)
(Reporting by Kanjyik Ghosh, Marie Mannes and Greta Rosen Fondahn; Editing by Hugh Lawson and Susan Fenton)
