Swedish appliance manufacturer Electrolux said it will launch a 9 billion Swedish crown rights issue - roughly $976.34 million - and enter into a strategic tie-up with Chinese rival Midea Group in North America as part of a broader operational restructuring.
Under the announced agreement, Electrolux and Midea will establish three joint ventures. One JV will be responsible for selling food preservation products across North America. A second will run a food preservation factory in Mexico. The third JV will operate a fabric care factory in South Carolina, the company said in a statement.
Proceeds from the rights issue will be used in part to fund the joint ventures and to support other restructuring measures across Electrolux's operations. The company said it anticipates reporting total negative non-recurring items - NRIs - of about 2.4 billion Swedish crowns in the second quarter of 2026 as a consequence of the partnership, with approximately SEK 0.9 billion expected to have a cash impact.
Electrolux also indicated plans to divest certain assets in Mexico in the third quarter of 2026, a move it expects will generate approximately SEK 1.0 billion of positive cash flow. Those proceeds are presented as part of the company’s plan to offset some of the cash impact tied to the partnership.
The company highlighted that its North American business represents around one-third of group sales. That business has faced persistent challenges, including high costs, underperformance at factories and strong competition. Electrolux said the region has undergone a series of aggressive restructuring attempts in recent years that have delivered limited results.
Electrolux reported net sales for the first quarter of 2026 of about 30 billion Swedish crowns, down from 32.58 billion crowns in the same period a year earlier. Operating income excluding non-recurring items for the first quarter came in around 200 million crowns, while the North American operations posted a loss of 900 million Swedish crowns.
Analysts had, on average, forecast an operating profit excluding non-recurring items for the group of 781 million Swedish crowns for the first quarter, according to a poll provided by Electrolux. Despite the announced rights issue and joint-venture arrangement, the company left its outlook for 2026 unchanged.
Electrolux said it has been pursuing restructuring measures, cost reductions and a shift toward more premium categories in an effort to improve profitability amid weak consumer demand and pressure from lower-priced competitors. The company’s shares rose 2.8% on the announcement. Currency used in the company’s disclosures indicates $1 = 9.2181 Swedish crowns.
Summary of the deal and financial impact
- Electrolux will conduct a 9 billion SEK rights issue and form three JVs with Midea in North America.
- The JVs will cover North American sales of food preservation products, operation of a food preservation factory in Mexico, and operation of a fabric care factory in South Carolina.
- The partnership is expected to produce about 2.4 billion SEK of negative NRIs in Q2 2026, with a cash impact of roughly SEK 0.9 billion; planned asset sales in Mexico expected to generate about SEK 1.0 billion in Q3 2026.
Operational context
Electrolux’s North American segment - representing roughly one-third of group sales - has been challenged by high costs, manufacturing underperformance and intense competition, prompting repeated restructuring efforts. The company reported lower year-on-year net sales for Q1 2026 and operating income excluding NRIs that fell short of analysts’ average expectations.