Electrolux appliance purchase Chilean company CTI

Electrolux has very strong roots in Latin America

STOCKHOLM—As part of its growth strategy in emerging markets, Electrolux will purchase the controlling stake in Koppers Company Sigdo Tecno Industrial SA (CTI). Electrolux through this acquisition will become the largest supplier of appliances in Chile and Argentina, and also strengthen the position of Electrolux  as an appliance company leader in the rapidly growing Latin American market.

Sigdo Koppers and associated divisions have agreed to sell its controlling stake in CTI, corresponding to approximately 64% of the outstanding shares (CTI listed on the Bolsa de Comercio de Santiago/ Santiago Stock Exchange). Under the terms of the agreement, Electrolux will launch an Initial Public Offering (IPO) to acquire 100% of the shares in CTI at a price of CLP$34.87 Chilean pesos per share, with a commitment to Sigdo Kopppers and other partners to bid participation of 64%.

In addition, Electrolux launched a public offer of shares to acquire all outstanding shares of Somela, a subsidiary of CTI, a company also listed on the Santiago Stock Exchange, for CLP $325 Chilean Pesos per share, CTI’s commitment to sell its stake of 78.5%. CTI’s net income from the sale of its shares in Somela will be distributed to shareholders through a pre-closing dividend of CLP $4.39 Chilean Pesos per share.

As part of this transaction, CTI will also pay a pre-closing dividend to shareholders based on net income for the first half of 2011, CLP $1.63 Chilean Pesos per share. In total, CTI shareholders will receive CLP$40.90 Chilean Pesos per share CLP. The implied total value of the company and its subsidiaries CTI corresponds to approximately CLP $318 billion Chilean Pesos. It is expected that public offerings of shares are released within ten working days of signing the agreement yesterday.

In Chile, CTI manufactures refrigerators, washing machines and stoves, and markets these products under the brands Fens, and Somela Mademsa. CTI is the leading manufacturer with a market share of 37% by volume.

In Chile, CTI manufactures refrigerators, washing machines and stove

Through its wholly owned subsidiary Frimetal SA it has a leading position in Argentina, which operates under the  GAFA brand. Somela is the largest provider of small appliances in Chile.

In 2010, CTI generated consolidated revenues of CLP $203 billion Chilean Pesos and an operating profit of CLP $32 billion Chilean Pesos, implying a margin of 16% and net income of CLP $23 billion Chilean Pesos. CTI has 1,200 employees and two plants in Chile and Argentina.

“This acquisition builds on the strengths of Electrolux and CTI, and provides significant growth opportunities that would be difficult to achieve for each company individually. Together we will generate significant revenue and cost synergies in relation to purchasing and production processes, “said Keith McLoughlin, president and CEO of Electrolux. “Latin America is important to our growth plans and we believe there is a path of success ahead for the combined efforts of Electrolux and CTI.”

“Electrolux has very strong roots in Latin America, and CTI has been partners in some Latin American markets over the past 15 years. We are committed to CTI’s strong brands , which are aimed at market segments that are complementary to segments of Electrolux, “said Ruy Hirschheim, President of Electrolux Major Appliances Latin America.”

Incoming search terms:

• CTI Chile