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By Richard Weiss, Bloomberg.  Electrolux AB (ELUXB), the world’s second- biggest appliances maker, will buy Compania Tecno Industrial SA in a transaction valued at about $690 million to become the largest supplier of appliances in Chile and Argentina.

Electrolux will offer 34.87 Chilean pesos per share in CTI, a 21 percent premium on the closing price of Aug. 16 before talks were announced, the company said in a statement today. Electrolux will also bid 325 pesos per share for CTI subsidiary Sociedad Manufacturera De Electroartefactos SA.

As Stockholm-based Electrolux has been working with CTI for the past 15 years, “CTI appears to be an ideal target,” James Stettler, an analyst at UniCredit, said in a note to clients today. “Expanding the base makes sense, but execution will be key.” Stettler recommends clients buy Electrolux shares and sees the stock rising to 200 Swedish kronor within a year.

CTI had 203 billion pesos ($430 million) in sales last year. The company has two manufacturing sites in Chile and one in Argentina and employs 1,200 people. It makes refrigerators, washing machines and stoves known under the Fensa and Mademsa brands in Chile, and under the Gafa brand in Argentina. The transaction is the second-largest purchase of an appliances maker announced in the past 12 months, according to Bloomberg data.

Electrolux said it secured a stake of about 64 percent in CTI from Sigdo Koppers SA and associated parties.

As part of the deal, CTI will pay its shareholders a pre- closing dividend of 1.63 pesos per share for the first half of 2011. The implied enterprise value for CTI and its subsidiaries is about 4.4 billion Swedish kronor ($690 million), Electrolux said.

“Latin America is very important to our growth plans,” Electrolux Chief Executive Officer Keith McLoughlin said in the statement. Electrolux is committed to CTI’s brands, which complement its own, the company said.