Chinese home appliance giant Midea completes acquisition of Teka
Chinese giant Midea is completing a deal to buy Teka Industrial, the group’s home appliances division. Although the transaction amount has not been disclosed, given the Cantabrian company’s delicate financial situation, it will barely exceed the value of the debt, which is around 100 million euros. According to sources consulted, Midea could prevail over the Saudi fund Alat, whose home appliances division has been headed since last year by Stefan Hoetzl, previously Teka’s chief executive.
Midea, which has a large international presence and more than 126,000 employees, specialized in small appliances and air conditioning systems, although it gradually expanded its market. In 2023, the Asian company, which was also a supplier to Teka in the past, achieved a turnover of 372,037 million yuan (47,072 million euros at current exchange rates), an increase of 8.18%. Its after-tax result also increased by 14% to 33.719 million yuan (4.266 million euros). This is not the first time an Asian group has carried out a major operation in Europe. following its 2016 acquisitions of German robot maker Kuka and Italian air conditioning maker Clivet.
Santander and BBVA had to come to Teka’s aid again late last year due to difficulties maintaining its viability despite having almost 15% market share in Spain. With more than 4,000 jobs and factories in Santander, Zaragoza and Granada, the company received two new loans totaling €20 million to meet working capital needs and have liquidity to pay suppliers.
Teka, owned by German businessman Maximiliam Brenner, has not yet published financials for either 2022 or 2023, but it has strong red numbers. and was forced to pay in cash due to the reluctance of his suppliers to supply him with products due to doubts about his solvency. New loans approved by the bank were added to the debt refinancing in July last year totaling €96 million, extending repayment terms until 2028. To facilitate the sale, Teka decided to split the debt last year. his business.
Sale of assets
The group hired HSBC to find a buyer for its white goods division, the most important of all with a turnover of 700 million euros, and on the other hand the US bank Lincoln International to transfer its Strohm subsidiaries, which specialize in taps. baths and Thielmann Portinox, a manufacturer of beer barrels. Pending the release of 2022 figures, Teka ended 2021 with a loss of €550,000, compared with red figures of almost €60 million in 2020, according to the latest published accounts.
In its audit report for that year, EY had already warned that “uncertainty exists regarding the group’s ability to continue as a going concern” given the predictable failure to meet financial ratios agreed with creditors and difficulties in repaying debt. maturities, which has been resolved, at least temporarily, through refinancing and new working capital loans. In any case, the situation is not easy, and Teka has already been forced to actually carry out several debt refinancing processes in recent years.