Electrolux to buy Chilean appliance company CTI for $691 million
22 August 2011
Electrolux A B, the world's second largest household appliance manufacturer, today said that it will buy Chilean appliance company CTI in a $691 million deal to expand in emerging markets amid weak sales in mature markets.
Stockholm-based Electrolux will offer 34.87 Chilean pesos per share to CTI, a 21 per cent premium on the closing price of 16 August before talks were announced.
As part of the transaction, CTI will also pay a pre-closing dividend to its shareholders of 1.63 pesos per share.
The acquisition will make Electrolux the largest supplier of appliances in Chile and Argentina, and further enhance its position as a leading appliance company in the fast-growing Latin American market.
Electrolux is proposing to acquire CTI, which is listed on the Santiago Stock Exchange, from Chilean conglomerate Sigdo Koppers and certain associated parties, which together own 64 per cent of the company.
CTI manufactures refrigerators, stoves, washing machines and heaters under the brands Fensa and Mademsa in Chile. It has a 36 per cent market share in Chile and a leading position in Argentina with the GAFA brand through its wholly-owned subsidiary Frimetal.
CTI, which has two manufacturing facilities in Chile and one in Argentina, had sales of CLP 203 billion or SEK 2.9 billion last year and an operating income of CLP 32 billion or SEK 450 million.
"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.