Whirlpool, Arçelik to create European major domestic appliance platform
Whirlpool Corporation has signed a definitive contribution agreement with Turkish multinational household appliances manufacturer Arçelik to create a European major domestic appliance (MDA) platform.
The proposed major domestic appliance platform anticipates to have combined sales of more than €6bn and generate more than €200 million of cost synergies.
Under the agreement, Arcelik will hold a 75% stake in the new entity while Whirlpool will own 25%.
The new entity will include Whirlpool’s European major domestic appliance platform business and Arcelik’s major domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses.
The transaction includes Whirlpool’s 38 European subsidiaries and nine manufacturing facilities situated in Italy, Slovakia, Poland, and the UK, as well as Arçelik’s 25 European subsidiaries and a couple of production sites in Romania, resulting in an annual manufacturing capacity of around 24 million white good products.
The new entity will produce, sell and offer after-sales services for branded home appliances, including refrigerators, washing machines and vacuum cleaners.
Whirlpool, Arçelik to create European major domestic appliance platform. Photo courtesy of YukiMuonMadobeNite/Wikipedia.org.
Marc Bitzer — Whirlpool Chairman and CEO said: “Today’s announcement marks yet another major and important milestone in our ongoing portfolio transformation.
“This allows us to participate in significant value creation from the repositioning of the business and cost synergies through our minority interest.”
Up on the completion, Whirlpool anticipates full-year cash provided by operations and free cash flow to increase by around $100 and $250 million, respectively.
The deal is anticipated to complete in the second half of 2023, subject to regulatory approvals and other customary closing conditions.
Whirlpool has also agreed in principle to separately sell its Middle East and Africa business to Arcelik while retaining ownership of its EMEA KitchenAid small domestic appliance business.
In August 2022, Arcelik separately purchased Whirlpool’s Russia business, which will not be part of the new combined company.
Arçelik is a wholly owned subsidiary Ardutch B.V and Whirlpool Corporation is a wholly owned subsidiary Whirlpool EMEA Holdings.