Whirlpool, Maytag Delay Merger
By Alan Wolf -- TWICE, 2/27/2006
Benton Harbor, Mich. — Whirlpool and Maytag have agreed to not close their planned merger before March 30 without the say-so of the U.S. Department of Justice in order to give the agency's Antitrust Division more time to review the $1.7 billion deal.
The extended review period — and the solicitation of sworn statements from retailers and other majap vendors by the Antitrust Division — has led to speculation that the Justice Department may be preparing a challenge to the proposed acquisition. A key consideration, industry observers told TWICE, is the 70-plus percent market share that a combined Whirlpool-Maytag entity would wield within the coveted laundry category.
In a prepared statement, Whirlpool chairman/CEO Jeff Fettig said, “We appreciate the work of the Department of Justice staff to date and will continue to work with them cooperatively as they complete their review. The agreed upon extension is simply a continuation of the review process. This is a complex and rapidly changing industry, and it is not surprising that some additional time is required to fully understand and fairly evaluate it.”
Maytag's chairman/CEO Ralph Hake added, “We believe this additional time will be sufficient for the review to be completed, and we are confident that the acquisition will close rapidly upon completion of the review.”
Whirlpool continues to argue that the merger would create substantial benefits for consumers, retailers and shareholders through improved products, quality and service, and that enhanced efficiencies would allow it to better compete in the global marketplace.
