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Maytag Buyout Rumors Re-ignite

Newton, Iowa — Months after rumors began circulating of Maytag’s possible purchase by Electrolux, a report in today’s New York Times has refanned the flames.

According to the newspaper, “executives close to Maytag” said the two companies are negotiating a $4 billion deal following months of talks that had stalled over a purchase price. Although a dollar figure was cited, the sources said an acquisition isn’t imminent, and that other appliance suppliers had made informal overtures to Maytag about a possible communion.

Adding weight to the speculation is a resolution, passed by Maytag shareholders in May, recommending that company actions be approved by a simple majority of voters rather than the supermajority previously required.

Shares of Maytag surged 12 percent to a seven-month high of nearly $42 in the hours after the story was published.

Last May, reported that Electrolux had denied that specific talks were taking place with Maytag, although managing director Michael Treschow allowed that “There are a lot of acquisitions in our track record. That strategy is still valid, in all of our markets. As usual, it’s a case that if the right opportunity turns up at the right time, then we’re interested in making an acquisition.”

Neither company would comment on the latest round of rumors.

Sweden-based Electrolux, which makes refrigerators and other majaps under the Frigidaire, Tappan, White-Westinghouse and Gibson brands, had global sales of $14.6 billion last year. Maytag, maker of Maytag, Jenn-Air, Admiral and Dynasty branded white goods and Dixie-Narco vending machines, had worldwide sales of $4.3 billion last year, although the company has been under earnings pressure since posting a disappointing 1999 third quarter.