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)
