Whirlpool Corporation Set To Sell Its African Business To Arcelik
Whirlpool Corporation Set To Sell Its African Business To Arcelik. Whirlpool Corporation announced the completion of the strategic review of its Europe, Middle East and Africa (EMEA) business and entered into a definitive contribution agreement with Arçelik A.Ş (“Arcelik”) which significantly accelerates Whirlpool’s portfolio transformation.
Under the terms of the agreement, Whirlpool will contribute its European major domestic appliance business, and Arcelik will contribute its major domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses into the newly formed entity of which Whirlpool will own 25% and Arcelik 75%. Separately, Whirlpool agreed in principle to the sale of Whirlpool’s Middle East and Africa business to Arcelik. Whirlpool will retain ownership of its EMEA KitchenAid small domestic appliance business.
The new entity is expected to have combined sales of over €6 billion and will be well-positioned to deliver value to consumers through attractive brands, sustainable manufacturing, product innovation, and consumer services. The combined businesses are expected to generate cost synergies of over €200 million. “Today’s announcement marks yet another major and important milestone in our ongoing portfolio transformation,” said Marc Bitzer, Chairman and Chief Executive Officer of Whirlpool Corporation. “This allows us to participate in significant value creation from the repositioning of the business and cost synergies through our minority interest.”
The transaction announced is expected to deliver net present value of future cash flows of over $750 million, primarily through predictable cash flows from multi-year licensing of the Whirlpool brand and the potential monetization of Whirlpool’s minority interest. As previously announced, Whirlpool separately sold its Russia business to Arcelik in August of 2022 for up to $260 million of deferred payments. The Russia business will not be part of the new combined company. Post closing, Whirlpool expects full-year cash provided by operations and free cash flow to increase by approximately $100 and $250 million, respectively, in addition to future proceeds from a licensing agreement entered into in connection with the transaction and any dividends from the new entity.
