Does China’s Midea want Zanussi? China-based Midea Group is eying Swedish appliances manufacturer Electrolux Group’s Zanussi brand and factories in Egypt, Al Shorouk reports, citing a source it says is in the know. The source reportedly said that Electrolux is evaluating several acquisition offers for its brands in Egypt, including Zanussi.

What we know: The source told the news outlet that the acquisition could be finalized by 4Q 2023, adding that Zanussi’s sales and maintenance operations in the country would not be affected.

REMEMBER- Electrolux last month said that it will sell its factories and brands in Egypt as part of global “reprioritization” plans that are expected to net almost USD 1 bn. Electrolux is planning to sell off the factories it owns here that produce Zanussi-branded products, as well as its rights to brands including Zanussi, which is one of the most popular home appliance brands in Egypt. Electrolux has been active in Egypt since 2011 when it acquired Olympic Group Egypt and employs more than 2.1k people locally.

The rationale: The exit comes as the company has been forced to scale back production since 2021 following disruptions resulting from covid-19, supply chain issues, and labor market disruptions. Electrolux also began working on a cost reduction program in several markets last year on the back of “weaker-than-expected market demand and weak earnings” in 3Q 2022. Difficulties importing raw materials and industrial components thanks to the FX crunch contributed to Electrolux’s decision to divest its Egyptian assets, Al Shorouk quotes its source as saying.

Midea has long eyed Electrolux: Earlier this year, Bloomberg reported that the Swedish manufacturer had rebuffed initial overtures by the Chinese home appliance giant about a potential acquisition. Midea has been interested in acquiring Electrolux for some time but would only want a friendly transaction, sources reportedly told the business information service.

And Midea is already expanding its operations here: Midea is setting up a USD 25 mn factory in China’s TEDA industrial zone and was recently granted a golden license to set up a USD 105 mn factory in Sadat City.

Advisors: Electrolux has tapped Société Générale to advise it on its sales.

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