BENTON HARBOR (WWJ) — Whirlpool Corp. (NYSE: WHR) announced that it has entered into agreements to become a majority shareholder (51 percent) in Hefei Rongshida Sanyo Electric Co. Ltd., a home appliances manufacturer based in Hefei, China.
Through this transaction, a Whirlpool Corporation subsidiary will acquire all shares currently owned by Sanyo Electric Co. Ltd. and Sanyo Electric Co. (China) Ltd., and purchase new Hefei Sanyo shares via a private placement.
The transaction is subject to customary conditions, certain termination rights, Chinese regulatory approval, and Hefei Sanyo shareholders’ approval. After the transaction is approved, Whirlpool will acquire a majority stake in Hefei Sanyo for approximately $552 million cash, based on the exchange rate as of Aug. 9. The transaction is expected to close by the end of 2014. Whirlpool expects that this transaction will be accretive in the first full year of integration.
“Whirlpool has a strong presence in China’s higher tier segments, this acquisition allows the company to build on, complement, and grow its position in the emerging Chinese market and to leverage our global enterprise for greater efficiencies,” said Jeff Fettig, CEO and chairman of Whirlpool. “As the leading global manufacturer and marketer of major home appliances, we will leverage the technology capabilities of Hefei Sanyo and provide the investments to enhance Hefei Sanyo’s research and development and product innovation capabilities. This will give Chinese consumers a broader range of innovative, high-quality products through our combined trusted portfolio of brands.”
Mike Todman, president of Whirlpool International, added: “Hefei Sanyo has an established nationwide distribution platform, a scaled manufacturing presence with opportunity for growth, and is ideally located in Hefei, a recognized appliance hub in China. Hefei Sanyo is a well-managed, profitable business with great prospects, led by an experienced and capable executive team with a track record of delivering strong performance.”
For additional information about the transaction, see Whirlpool’s Current Report on Form 8-K dated Aug. 12.
Whirlpool’s earnings and cash flow outlook for the full-year 2013 remain unchanged from the last update contained in its earnings release dated July 19.
Whirlpool is the world’s leading manufacturer and marketer of major home appliances, with annual sales of approximately $18 billion in 2012, 68,000 employees, and 65 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world. Additional information about the company can be found at http://www.whirlpoolcorp.com.
Hefei Sanyo was established in 1994. It ha revenue of $636 million and net income of $48 million in 2012. Its major products are washers, refrigerators and microwave ovens sold under the Sanyo, Rongshida, Royal Star and Diqua brands. It has about 10,000 employees.