Leading global household and professional appliances company AB Electrolux, has announced it intends to seperate its Professional Products business area, a leading provider of foodservice, beverage and laundry solutions, from the Group.
The Electrolux board of directors has initiated a proposal for a forthcoming shareholders meeting that the Group is split into two listed companies, ‘Electrolux’ – for household appliances including well-established brands including Electrolux, Frigidaire and AEG, and ‘Electrolux Professional’ – for professional appliances.
The board believes that the split has the potential to create “substantial shareholder value” over time, because the two businesses have “different end markets, customers and success drivers”. A separation will also ensure both companies can 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 costs to separate the two business are expected to be “relatively low”. If shareholders decide in favour of the proposal, AB Electrolux shareholders will receive shares in Electrolux Professional in proportion to their shareholding in AB Electrolux. The board’s intention is to list Electrolux Professional on Nasdaq Stockholm during the first half of 2020.
Best in class
“Electrolux Professional is the only supplier in the professional appliances space with a full and integrated offer of solutions under one brand,” says 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 (pictured), says: “This is a good move for both the Group and for Professional, because we will both have the possibility to 100% 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.”