DES MOINES, Iowa:
MAYTAG CORP. has signed a formal agreement to be acquired by its larger appliance making rival Whirlpool Corp. for more than US$1.7 billion in cash and stock, the company said yesterday.
Under terms of the deal, Maytag will be acquired for US$21 a share. Whirlpool is also assuming US$977 million of Maytag debt.
Jeff Fettig, Whirlpool CEO, offered reassurances that the combination of Whirlpool, the nation's largest appliance manufacturer, and Maytag, the third largest, will gain approval of federal regulators.
The Whirlpool CEO said the combination of Whirlpool and Maytag will create substantial benefits for consumers, trade customers and our shareholders.
"This transaction will enable us to achieve significant efficiencies and better asset utilisation. It will also allow us to offer a wider range of products to a much broader consumer base," he said in a statement.
TERMINATED DEAL
Analysts have said the deal will take up to nine months to complete as regulators study antitrust implications.
Prior to signing the Whirlpool agreement, Maytag terminated its earlier deal to be acquired for US$1.13 billion, or US$14 a share, by a New York-based investment group led by Ripplewood Holdings. Maytag paid the US$40 million termination fee, and is being reimbursed by Whirlpool.
Maytag cancelled the September 9 special shareholders' meeting, which had been called to hold a vote on the Ripplewood deal. Maytag shares fell five cents to US$18.66 in afternoon trading Monday on the New York Stock Exchange, while Whirlpool shares fell 79 cents to US$81.04.
