Electrolux, Midea Enter North American Appliance Pact

Will design, manufacture and sell refrigeration and laundry

By Alan Wolf, YSN

Swedish appliance giant Electrolux and Chinese white-goods manufacturer Midea will jointly design, manufacture and sell refrigerators and produce laundry products in North America under a long-term strategic partnership beginning this summer.

Electrolux said the 15-year pact is designed to support long-term profitable growth through innovation, improved efficiencies, cost competitiveness and greater operational flexibility. It also addresses what the company described as its “overarching efforts to transform [its] business in North America,” which accounts for about 34% of its global sales.

The agreement calls for the creation of three separate joint ventures in which the partners will share in sales and production:

• Under a 50-50 sales joint venture for food preservation, the partners will co-develop what is described as “a full line of innovative, differentiated refrigeration products” under both companies’ brands. The operation is expected to begin in the third quarter.

• Under a manufacturing joint venture in Mexico, both companies will operate Electrolux’s refrigeration factory in Juarez beginning in the third quarter. Midea will purchase a 65% interest in the plant and Electrolux will retain a 35% stake in addition to its laundry production operations, which will remain exclusive to Electrolux.

• The third joint venture will convert Electrolux’s refrigeration factory in Anderson, S.C., to laundry production. The phaseout of refrigeration will be completed by July and joint laundry production by the partners is expected to begin in the first half of 2027, with Electrolux controlling 55% of the joint venture and Midea taking 45% of the shares.

Electrolux will continue to operate its refrigeration facility in Springfield, Tenn., its dishwasher plant in Kinston, N.C., and the aforementioned laundry operation in Juarez.

A 20-Year History
The strategic partnership builds on the companies’ 20-year sourcing relationship, and will combine Electrolux’s market presence, infrastructure and consumer insights with Midea’s operational and innovative strengths, its investments in efficient manufacturing and supply chain, and its industrial flexibility, the partners said.

Midea Group is a diversified manufacturing conglomerate and one of the world’s largest producers of domestic and commercial appliances, with approximately $63.7 billion in total global sales. The company maintains a U.S. presence through BrandSource vendor partner Midea America, which is headquartered in New Jersey and operates R&D facilities in Kentucky and California.

“This partnership marks a major milestone in the execution of Electrolux Group’s strategy and puts us in a position to accelerate profitable growth,” said President/CEO Yannick Fierling. “It enables us to continue to invest in sustainable, consumer-centric innovations to serve our customers and consumers with even stronger product offerings in North America.”

For the first quarter ended March 31, Electrolux reported an operating loss of $94 million and an 11.6% decline in year-over-year sales in North America due to what the company described as the impact of tariff costs and significantly weaker consumer demand.

Electrolux expects to write off about $260 million in the current quarter for the refrigeration phaseout in Anderson and layoffs of some 1,500 employees there. The partners also expect to spend about $119 million in capital expenditures over the next three years to upgrade the Juarez facility and retrofit the Anderson complex. Upwards of 1,200 workers will be hired in 2027 and 2028 to operate the revamped Anderson factory, Electrolux said.

Following the partnership’s initial 15-year term, the agreement will extend automatically by consecutive 10-year periods, barring termination by either party three years in advance.

Midea Group offered to purchase Electrolux for $3.6 billion in 2023 according to a Bloomberg report, but was ultimately rejected by Electrolux and its majority shareholder, AB Investors.

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