Electrolux CFO Departure Adds to Woes After GE Deal Collapseby
Appliance maker sees second top executive resign in two weeks
Shares have lost 24 percent since failure of GE acquisition
Electrolux AB lost its second top executive in as many weeks after the failed acquisition of General Electric Co.’s appliance unit left the Swedish household-goods maker paying millions in breakup fees only to gain a new competitor in the U.S.
Chief Financial Officer Tomas Eliasson is resigning to join Sandvik AB, Stockholm-based Electrolux said Friday, less than two weeks after Chief Executive Officer Keith McLoughlin announced his retirement. Electrolux has begun looking for Eliasson’s replacement, the maker of Frigidaire refrigerators and AEG stoves said.
The departure will deprive Electrolux of management continuity just as it’s about to face renewed competition in the U.S. from Haier Group, the Chinese company that agreed to buy GE Appliances after the purchase by Electrolux fell through.
“It’s negative for Electrolux,” said Karri Rinta, an analyst at Handelsbanken in Stockholm. “He was, according to me and probably according to most people, a very competent CFO.”
Electrolux shares slumped 1.2 percent to 180.80 kronor at 11:05 a.m. in Stockholm, even as the broader stock market rallied. The stock now has lost 24 percent of its value since Dec. 7, when GE walked away from the $3.3 billion deal, which would have been Electrolux’s largest acquisition to date.
GE pulled out of the deal because of opposition from U.S. antitrust regulators, requiring Electrolux to pay a $175 million breakup fee. GE then dealt another blow to Electrolux by agreeing to sell the unit to Haier for $5.4 billion.
Not only was the price an indication of the value lost to the Swedish company, but the new deal also is likely to add competitive pressure to the U.S. appliance market, in which Electrolux sought to rival Whirlpool’s dominance by acquiring GE Appliances. Instead, it looks likely to end up with a new competitor that could pursue growth more aggressively than GE has.
Eliasson’s new job is unlikely to offer him any respite from industry challenges. When he joins Sandvik sometime before late July, he will be the company’s fifth CFO since 2009. The maker of cutting tools and mining equipment has been plagued by weak end markets and share underperformance for years.
Sandvik’s poaching of Eliasson marks the company’s second high-profile executive recruitment since Johan Molin took over as chairman in May. In November, Bjoern Rosengren, the former CEO of Finnish engine maker Wartsila Oyj, took the same job at Sandvik, replacing Olof Faxander. Eliasson replaces Mats Backman, who is joining Autoliv Inc.
Eliasson is no stranger to Sandvik and its leadership, having served as CFO of Sandvik subsidiary Seco Tools between 2002 and 2006, and then spending five and a half years as the CFO of Assa Abloy AB under Molin, who is CEO of the Swedish lockmaker.
Sandvik rose 5 percent to 70.15 kronor.