Electrolux announced Monday that its CEO Keith McLoughlin would resign just one month after the Swedish appliance maker’s deal to buy General Electric’s appliance division failed.
Chad Bray of The New York Times had the day’s news:
The Swedish appliance maker Electrolux said on Monday that its top executive planned to retire, an announcement that comes a month after a deal to buy General Electric’s century-old appliance division for $3.3 billion fell apart.
G.E. called off the deal in December after the Justice Department moved to block the transaction. It was the second time in recent years that G.E. had tried to sell the division.
In a news release, Electrolux said that Keith McLoughlin, an American, had notified the company’s board of directors that he planned to retire as chief executive, although he would continue as a consultant in North America.
“It is now time for me to pass the baton and return to my family” in the United States, Mr. McLoughlin, who turns 60 this year, said in the news release.
Jonas Samuelson, who leads Electrolux’s major appliances business for Europe, the Middle East and Africa, was set to take the helm as president and chief executive on Feb. 1. Mr. Samuelson joined the company in 2008 and previously served as head of Electrolux’s global operations and as chief financial officer.
Aditya Kondalamahanty of The International Business Times broke down why the company’s recent GE deal failed:
Electrolux’s efforts to buy out GE’s appliances business failed last month, as GE walked away from the deal after months of opposition from U.S. antitrust regulators. The $3.3 billion deal would have vaulted Electrolux ahead of Whirlpool as the world’s largest appliance maker.
However, the company ended up having to go to court to fight the U.S. Justice Department’s claims that the combined company would be overly dominant in the U.S. cooking-appliance business. On Dec. 7, the two companies announced that they were abandoning the plan, leaving Electrolux to foot a termination fee of $175 million to GE.
After the deal collapsed, Electrolux unveiled a plan to cut costs and jobs at its small-appliance unit, which it said was unrelated to the deal. The company said the cost-cutting measures would “reach full effect” from the end of 2016, with estimated annual cost savings of 120 million kronor ($1.4 million).
Electrolux shares were trading marginally lower Monday on the Stockholm stock exchange. The company has lost more than 20 percent, or a fifth, of its market value since December.
Johannes Hellstrom and Sven Nordenstam of Reuters discussed the appliance company’s new CEO:
In recent years, Electrolux has increased its focus on profitable segments like cooking, and boosted productivity through modularization, or using more components common to a range of products.
“We will not change our basic strategy,” Samuelson told a conference call. “We will continue to improve cost, quality and flexibility, through for example modularization of our product designs and through smart automation of our manufacturing processes.”
The 59-year old McLoughlin, an American who took the helm at Electrolux five years ago, said in a statement he would return to his family.
With McLoughlin’s family having returned to the United States several years ago, it was widely expected he could soon leave, even before the GE deal broke down. Samuelson had been the main internal candidate to replace him.
However, McLoughlin said immediately after the General Electric deal collapsed last month he remained committed to Electrolux and would continue as CEO.
The EMEA unit’s profitability has improved under Samuelson’s leadership, despite a tough market and intense price pressure. In the third quarter of 2015, it reached an operating margin of 6.3 percent, the highest since 2010.
Electrolux has shifted much of its production to low-cost countries over the past decade.
John Hernander, lead portfolio manager for Swedish equities at Nordea Asset Management, which had a 4 percent stake in the company as of Sept. 30, welcomed the choice of Samuelson as new CEO.
“In our opinion, Jonas has done a good job in turning around profitability of the European business, despite tough underlying market conditions,” Hernander said, adding he did not expect major changes to the firm’s strategy.
