Electrolux Working on Succession Plans

By Christina Zander 

STOCKHOLM-- Electrolux AB failed on Thursday to quash speculation about an imminent management shake-up at Europe's largest home-appliance maker, saying that its American chief executive had not resigned but adding that it was working on succession plans.

The possible departure of Keith McLoughlin could leave the Swedish giant without strong leadership at a time when the company is seeking to close the $3.3 billion purchase of General Electric Co.'s appliances business.

Talk that Mr. McLoughlin could leave was ignited by a report in Swedish daily Dagens Industri which said that the CEO had informed the Electrolux board of his desire to step down. The report added that Electrolux was considering offering the job to Charles Blankenship, who heads GE's appliance business.

Mr. McLoughlin and spokespeople at GE's appliance unit, did not respond to emails seeking comment.

Electrolux shares were changing hands at 262.40 kronor ($31.84), down 2.2% in mid-afternoon trade on Sweden's stock exchange, with analysts citing concerns over a possible management vacuum at a sensitive time for the company.

The GE Appliances acquisition, which is expected to close later this year, will put Electrolux head-to-head with the industry leader, Whirlpool Corp of the U.S. The merger is expected to generate synergies of $350 million over the next few years.

Electrolux is also in the process of turning around its own North American arm, which is run by Mr. McLoughlin after the head of the unit left the company in April. The unit's poor performance led Electrolux to issue a profit warning in the spring, and eventually post a 21% drop in first-quarter net profit.

Mr. McLoughlin, who joined Electrolux in 2003, became chief executive in 2011. His appointment was riddled with controversy in Sweden over what was seen as his hefty paycheck, one of the country's highest.

Since January, he has been staying at Stockholm's Grand Hôtel--one the city's fanciest buildings with a view of the Royal Palace--after the lease on his apartment ran out at end of 2014.

Write to Christina Zander at [e-mail]

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