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STOCKHOLM, Jan 31 (Reuters) - Swedish home appliance maker Electrolux said on Thursday it would spin off its Professional Products business, and that by splitting in two it would create extra shareholder value.
The Professional Products business, which makes commercial kitchen and laundry equipment, had revenue of 6.3 billion crowns ($697 million) in the first nine months of 2018, and would be listed on the Nasdaq Stockholm index during the first half of 2020.
The home appliances unit would continue independently.
The rival of U.S. maker Whirlpool Corp said its financial targets will remain unchanged following a separation of the professional unit and that separation costs were expected to be “relatively low”.
“Electrolux Board of Directors believes that such a split has the potential to create substantial shareholder value over time, given that the two businesses have different end markets, customers and success drivers,” the company said in a statement.
Electrolux had revenues of nearly 90 billion crowns in the first nine months of 2018.
It said in a separate statement that it would reinitiate manufacturing and product investment in the United States and would transfer refrigeration manufacturing from a facility in Chile to other locations.
The measures will lead to restructuring charges in the first quarter of around 1 billion crowns, of which around 300 million crowns will impact cash flow.
Electrolux said it sees annual savings of about 1 billion crowns with full effect from 2022 as a result of the measures announced today.
$1 = 9.0449 Swedish crowns Reporting by Olof Swahnberg; editing by David Evans and Alexandra Hudson