(Yicai) July 19 -- Haier Smart Home, a subsidiary of Chinese home appliance giant Haier Group, said it will fully acquire the South African water heater business of Sweden's Electrolux for ZAR2.5 billion (USD136.7 million).

Haier Smart Home will buy Electrolux South Africa and take over its staff to enhance its market presence in Africa, the Qingdao-based company announced yesterday, citing a deal it inked with its parent firm on the same day. The transaction is pending regulatory approvals and will be complete next quarter, it added.

Haier Smart Home will help expand the product portfolio of ESA's water heater brand Kwikot, it noted. It plans to launch new solar water heaters and purifiers and improve Haier's white goods business in South Africa, including refrigerators and washing machines, using ESA's local sales channel advantages, it pointed out.

With a population of about 61.4 million, South Africa is the second-largest economy on the continent. Kwikot was set up over 100 years ago and has complete local installation and after-sales services networks.

Stockholm-based Electrolux has faced performance pressure, with its operating loss expanding 62 percent to SEK3.2 billion (USD301.4 million) in the three months ended Dec. 31 from a year earlier. The sale of ESA likely aims to reverse the loss as quickly as possible.

Haier Smart Home has been actively deepening its market presence in Africa. It opened a USD160 million Egypt Ecological Park in May, with an annual output of more than 1.5 million products, including air conditioners, washing machines, televisions, refrigerators, and ice lockers.

Shares of Haier Smart Home [SHA: 600690] fell 0.5 percent to CNY26.75 (USD3.68) apiece as of lunch break in Shanghai today, after dropping by as much as 1.9 percent in the morning trading session.

Editors: Tang Shihua, Martin Kadiev