Whirlpool Corp, the largest appliance maker in the US, is
considering offering US$1.35 billion in cash and stock for Maytag
Corp, topping bids from China's Haier and a
consortium led by Ripplewood Holdings LLC, and raising antitrust
concerns.
Whirlpool, which makes appliances under that name as well as the
KitchenAid brand, bid US$17 a share, exceeding Haier Group's US$16
offer and Ripplewood's US$14 proposal. Whirlpool, which would
assume US$969 million in debt, said on Sunday that it would decide
by August 9 whether to make a formal offer for Maytag, the
third-biggest US appliance maker.
A takeover would give Whirlpool brands such as Maytag, Jenn-Air
and Amana, and almost half of the US market. The Benton Harbor,
Michigan-based company, which is taking market share from Maytag
after expanding production to lower-cost countries and introducing
upscale appliances, said a merger would "achieve substantial
efficiencies that will deliver cost savings."
"It makes sense strategically," said Laura Champine, an analyst
at Morgan Keegan Inc who has a "buy" rating on Whirlpool and a
"hold" on Maytag. Still, there may be questions about this
"particular combination," she said by telephone from Memphis,
Tennessee, late on Sunday.
Maytag's shareholders are scheduled to vote on the offer from
Ripplewood, a New York-based buyout firm, on August 19. Ripplewood
spokesman Jeffrey Taufield did not return phone calls.
Haier, along with two private-equity firms, is scrutinizing
Newton, Iowa-based Maytag further before making an official offer.
Haier, based in the eastern Chinese city of Qingdao, said in a
faxed response to Bloomberg that it was watching the Maytag sale
"closely" and hadn't made any decision.
"I suspect Haier still has room to boost its bid," said Lu
Yizhen, former chief analyst with E-Fund Management Co who's
helping to set up CITIC-Prudential Fund Management Co. in Shanghai.
"They have a low-cost advantage, which they could use more to their
advantage with a well-known brand."
Haier, China's biggest maker of home appliances with US$12.2
billion in sales in 2004 might use its factories in China to lower
Maytag's costs and help it compete with Whirlpool.
(China Daily July 19, 2005)