HAIER Europe Appliances Holding’s acquisition of the Kwikot part of Electrolux South Africa’s business has been conditionally approved by the Competition Commission of South Africa.
In July, the Electrolux Group said it had signed an agreement to divest its water heater business in South Africa under the Kwikot brand for an enterprise value of ZAR 2.4 billion to Haier Smart Home.
“The divestment includes the Kwikot brand and the production facilities for water heaters (geysers) located in Johannesburg, and is part of the previously communicated work to sharpen the Group’s strategic focus by divesting non-core assets.
“The water heater business in South Africa is profitable and the Kwikot brand is well-known in the market. Net sales in 2023 related to this business amounted to approximately ZAR 1.9 billion,” the Electrolux Group said.
In a media statement on 5 November, the Competition Commission said the primary acquiring firm, Haier, is a private company incorporated in accordance with the laws of the Netherlands. Haier is controlled by Haier Singapore Investment Holding. Ultimately, Haier Singapore is controlled by Haier Group Corporation. Haier does not control any firm in South Africa.
The Commission said that globally, Haier Corp, headquartered in China, is active in the manufacture and supply of consumer electronics and domestic appliances. It derives turnover from South Africa for the supply of bio-medical products such as cryopreservation products and consumables, biological safety cupboards, bio-culture, liquid nitrogen canisters, vaccine refrigerators and intelligent monitoring devices.
Electrolux SA’s Kwikot business includes the manufacture and distribution of hot water systems, solar water heating systems, valves, drip trays, insulation, heat pumps and a wide range of stainless-steel kitchenware and sanitaryware for domestic and commercial use.
Electrolux SA also markets and sells home appliances, vacuums and accessories under the AEG, Electrolux and Kelvinator brands. This ‘home appliance’ business does not form part of the proposed transaction.
Electrolux SA is directly controlled by Aktiebolaget Electrolux (publ), a Swedish firm.
The Commission said it is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.
To address public interest concerns, the Commission said the merger parties shall establish an employee share ownership programme (ESOP) for qualifying workers within 24 months from the merger implementation date. In addition, Electrolux SA will not retrench workers as a result of the merger for two years following the merger implementation date. The proposed transaction does not raise other significant public interest concerns, according to the Commission.
