A historic moment for the world appliance market: Whirlpool EMEA was sold to the Turks by Arcelik but with only one variant, with a percentage of 75% while the remaining 25% remains with Whirlpool and everything is transferred to a new company divided precisely according to the shares communicated. As premature from FIRSTonline, “Whirlpool Corporation today announced that it has completed a strategic review of its Europe, Middle East and Africa (EMEA) business and has entered into a definitive acquisition agreement (“Agreement”) with Arçelik A.Ş (“Arcelik ”), which significantly accelerates the transformation of the Whirlpool portfolio”. The transaction should be completed within the second half of the current year. One detail is important and should be underlined: the 25% share would seem destined to remain in the hands of the Corporation since the agreement reached grants the new Newco the license to use the brand for 20 years. Whirlpool Corp therefore seems oriented to keep a foot in Europe.
Whirlpool sold to the Turks: a 6 billion European platform is born
Under the terms of the agreement, a statement explains, “Whirlpool will contribute its European major appliances business and Arcelik will contribute its white goods, consumer electronics, air conditioning and small appliances businesses, to create a new which Whirlpool will own 25% e Arcelik 75%. Separately, Whirlpool has achieved a agreement in principle for the sale and transfer of its business in the Middle East and Africa to Arcelik. Whirlpool will continue to own the assets of the EMEA Kitchen Aid small appliance business. The combined turnover should be, according to the forecasts of over 6 billion and will be well positioned to deliver value to consumers through attractive branding, sustainable manufacturing, product innovation and consumer services. The combined businesses are expected to generate cost synergies of more than €200 million.”
Whirlpool: the Turks win in the final
Against the solution Midea, which made the most substantial offer and has also relaunched, there is stiff opposition from American governmental and non-governmental circles, translated into Biden's recent provisions which provide for 369 billion dollars in tax breaks and credits for the green transition provided both made in the USA and in any case with an anti-China function. As for the value of the transaction, according to rumors collected by FIRSTonline, it would seem linked to the shares and this should be specified on January 31st when there will be the official communication from the president and CEO of Whirlpool Corporation Marc Bitzer to the shareholders. An operation that we can anticipate, this one by Whirlpool Emea, conducted quickly by the European president Gilles Morel and above all with the inclusion in the new company not only of the brands but also of the factories and of the Italian ones in particular considered the jewels of the group in a period destined to last with growing logistics crises.
Bitzer (Whirlpool) satisfied with the deal
Bitzer declared himself satisfied (among other things, it seems that his future should be dedicated to politics at home): "Today's announcement marks another important and decisive milestone in the transformation of our portfolio", said the president adding that “this allows us to participate in significant value creation with business repositioning and cost synergies through our minority stake.”
Whirlpool to the Turks: how will the employees take it?
Until the closing of the transaction, Whirlpool's European operations will be included in the current company's results, and Whirlpool will have no obligation to provide financing to the new company after the closing of the transaction. The employee reactions they will not be long in coming, but given the very heavy market situation which will end 2022 with sales figures in sharp decline and with an equally negative start to 2023, the reactions of the European trade union representatives (all sites remain active) should be positive or, anyway, not as bad as apparently was expected.
