Lakeshore and Manufacturing

Whirlpool acquires majority stake in Italian appliance maker for $1B

July 11, 2014
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Whirlpool
Benton Harbor-based Whirlpool is a global maker of household appliances. Photo via fb.com

Whirlpool is strengthening its European presence by entering into three agreements to acquire a majority stake in an Italian appliance maker for $1.03 billion.

Trio of deals

Whirlpool Corporation (NYSE: WHR), a global maker of major home appliances in Benton Harbor, said yesterday that it’s simultaneously entering into binding agreements with Fineldo S.p.A. and members of the Merloni family to purchase 66.8 percent of the voting stock of Indesit Company S.p.A.

Through the three share purchase agreements, Whirlpool will acquire a 42.7-percent stake in Indesit through Fineldo, a holding company based in Italy, 13.2 percent of Indesit from certain members of the Merloni family and a 4.4-percent stake from Ms. Claudia Merloni.

The total 60.4 percent of capital stock in Indesit is equal to the 66.8 percent voting stake, due to treasury shares held by Indesit.

The Italian manufacturer has eight locations throughout Italy, Poland, the U.K., Russia and Turkey.

With the purchase price under the Fineldo agreement subject to fluctuations based on Indesit’s average net debt position for 2014, the current estimated purchase price is at $15.06 per Indesit share, or a total purchase price of more than $1.03 billion.

Depending on market conditions at the time of closing, Whirlpool anticipates funding the share purchase with cash on hand, in coordination with public debt through private, domestic and international financing.

European market

Jeff M. Fettig, chief executive officer and chairman at Whirlpool, said the acquisition was based on several factors: strategic fit, shareholder value and a high degree of confidence in the organization’s ability to execute.

“We expect this opportunity to position our European business for growth and ongoing value creation with a well-respected and established company such as Indesit,” Fettig said. “We believe this will ideally position us for sustainable growth in the highly competitive and increasingly global home appliance market in Europe.”

Marc Bitzer, president of North America and EMEA for Whirlpool, said the expectation is the transaction will allow the company to increase efficiency in Europe through improved asset utilization and complementary country positions.

“We foresee the acquisition strengthening and sustaining our European manufacturing and enabling our products to be more competitive and value creating,” Bitzer said. “European trade customers and consumers will benefit from the improved efficiency through our investments in innovation and technology leadership provided by the combined strength of Whirlpool and Indesit.”

Gian Oddone Merli, chief executive officer at Fineldo S.p.A., said the agreement between Whirlpool and the holding company provides Indesit with tools to build a solid and sustainable future.

“During the last several months of discussions, Whirlpool has proven to be the right partner, with a similar culture and unique ability to offer long-term growth, capitalizing on the attention to quality that has always characterized Indesit,” Merli said. “The benefits Indesit will derive from this investment are significant, including the ability to bring its know-how and products to a company with a global scale.”

Closing

Currently, the Fineldo and Merloni family agreements are expected to close by the end of 2014, while the closing on Ms. Claudia Merloni’s 4.4 percent stake is anticipated to close within five business days of July 9.

The Fineldo and Merloni family agreements are subject to EMEA regional clearances and authorization of the Court of Ancona. The EMEA region consists of Europe, the Middle East and Africa.

Upon closing, Whirlpool will initiate a mandatory tender offer on the remaining share of Indesit, as required by Italian law, for the highest price per share Whirlpool paid.

Whirlpool

Founded in 1911, Whirlpool has principal locations in Benton Harbor, Brazil, Italy and Shanghai, with approximately 69,000 employees and 59 manufacturing and research technology centers across the globe.

The home appliance maker markets brands such as Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and Gladiator.

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