CHARLOTTE, N.C.—AB Electrolux, a leading global company selling household and professional appliances, announced that it is preparing for the separation of its Professional Products business area from the Group. The Electrolux Board of Directors has initiated work intending to propose that a shareholders meeting decide to split the Group into two listed companies, “Electrolux” for household appliances and “Electrolux Professional” for professional appliances, and to distribute Electrolux Professional to the shareholders of AB Electrolux in 2020.
Electrolux Board of Directors believes that such a split has the potential to create substantial shareholder value over time, given that the two businesses have different end markets, customers and success drivers. A split will enable both companies to focus on their respective opportunities to drive profitable growth, with distinct strategies for innovation and customer focus, as well as a high level of capital efficiency. The separation costs are expected to be relatively low.
Electrolux Professional is a leading provider of food service, beverage and laundry solutions to a wide range of customers, from restaurants and hotels to healthcare and other service facilities. It is a global operation with business in EMEA, North America and APAC. Its market is characterized by high demands on quality and efficient solutions, which requires offering a full set of best-in-class products, superior customer care as well as innovation and investments in connectivity.
The Electrolux Group’s core consumer business offers household appliances under a range of well-established brands including Electrolux, Frigidaire and AEG. It holds leading market positions in targeted areas. Electrolux has a strong track record and emphasis on innovation for outstanding consumer experiences. Its market is characterized by increased consumer power, sustainability, digitalization, a growing middle-class driving demand and industry consolidation.
Financial Targets to Remain Unchanged
“Electrolux Professional is the only supplier in the professional appliances space with a full and integrated offer of solutions under one brand,” said Staffan Bohman, Chairman of the Board of Directors of AB Electrolux. “As such, it has significant potential for long-term value creation as an agile stand-alone company, which can pursue growth through market consolidation and innovation. Electrolux believes its core consumer business also stands to benefit both in terms of growth and margins from a sharpened focus on consumer experience innovation, the aftermarket and emerging markets. Electrolux financial targets will remain unchanged following a separation of Electrolux Professional.”
Alberto Zanata, Head of Professional Products, says: “This is a good move for both the Group and for Professional, because we will both have the possibility to 100 percent focus on our customers—who are different—and our industry dynamics, which are also different. We welcome the proposal, as it means we will have an even better position to make our customers’ work-life easier, more profitable, and truly sustainable every day. Will this impact our everyday work-life? We see no major changes influencing the short-term but step-by-step we envision becoming the one business partner in food, beverage and laundry even faster.”
The preparations have been initiated and the Board intends to present a proposal for the distribution and listing of Electrolux Professional to a shareholders meeting. If the shareholders decide in favor of such a proposal, AB Electrolux shareholders will receive shares in Electrolux Professional in proportion to their shareholding in AB Electrolux.
The intention is to list Electrolux Professional on Nasdaq Stockholm during the first half of 2020. The Board expects to provide an update on the preparations and a more detailed time plan around mid-year 2019. A distribution of Electrolux Professional is expected to meet the requirements of Lex Asea, which in brief means that there should not be any immediate tax consequences for Sweden-based shareholders of AB Electrolux since they should only be taxed on the value of the shares received in Electrolux Professional when they sell them.