Dealers Endorse Whirlpool-Maytag Merger
By Alan Wolf -- TWICE, 4/10/2006
Benton Harbor, Mich. — Retailers largely lauded Whirlpool's long-anticipated acquisition of Maytag, which closed late last month after the United States Department of Justice (DOJ) cleared the way for the multi-billion merger.
“We favored and supported that move,” said Thomas Frank, chairman/CEO of Conn's. “Maytag is a very viable brand, consumers like it, and we wanted to see a company restore it to a quality brand.
“Whirlpool is an important business partner,” he added, “and will help us grow in laundry.”
Bob Lawrence, executive director of the Brand Source buying group, concurred. “We supported Whirlpool's merger with Maytag. It's the best of all possible alternatives,” he said.
Wasting no time after receiving the DOJ's blessings last month, Whirlpool completed its long-awaited acquisition of Maytag within 24 hours of getting the green light. The aggregate transaction value, including approximately $0.9 billion of Maytag debt, is $2.6 billion.
Maytag chairman/CEO Ralph Hake announced his resignation two days later.
Whirlpool said the newly combined enterprise would begin the integration process immediately. Whirlpool management will lead the combined company, which will be headquartered at Whirlpool headquarters, here. The company said it plans to provide more detailed information about its merger plans in approximately 60 days.
The combined company plans to release its first-quarter earnings results on April 25.
The acquisition ends months of speculation — fanned by a longer-than-expected DOJ investigation — that the agency would challenge the merger, which will give the combined entity a greater than 70 percent share of the U.S. laundry market and about half of total U.S. dishwasher share.
Indeed, it is that concentration of production that prompted the DOJ to extend its investigation last month. Ultimately, however, the agency's antitrust division determined that “large appliance dealers have alternatives available to help them counter any attempted exercise of market power by an appliance manufacturer.” The unit specifically cited U.S. market newcomer LG as a major white-goods counterweight, along with GE, Electrolux, Samsung, Fisher & Paykel and Bosch-Siemens.
