Whirlpool Corp. plans to buy a 51% stake in Chinese appliance producer Hefei Rongshida Sanyo Electric Co. Ltd. Whirlpool already sells appliances in China--mostly higher end units. In 2012 it formed a strategic alliance in China with retailer Suning Appliance Co., which has 1700 retail outlets in the country. The stake in Hefei Sanyo will give Whirlpool a larger distribution network and established mid-range product presence.
Whirlpool Corp. will acquire all the shares currently owned by Sanyo Electric Co. Ltd. and Sanyo Electric Co. (China) Ltd., and will buy new Hefei Sanyo shares via a private placement. Approval from Chinese regulators and Hefei Sanyo shareholders is needed to complete the transaction. The acquisition will cost Whirlpool approximately RMB 3.4 billion or US $552 million, based on Aug. 9, 2013 exchange rates, and is expected to close by the end of 2014. Whirlpool expects the transaction to be accretive in the first full year of integration.
"Hefei Sanyo has an established nationwide distribution platform, a scaled manufacturing presence with opportunity for growth, and is ideally located in Hefei, a recognized appliance hub in China," said Mike Todman, president of Whirlpool International. "Hefei Sanyo is a well-managed, profitable business with great prospects, led by an experienced and capable executive team with a track record of delivering strong performance. "
"This acquisition allows the company to build on, complement, and grow its position in the emerging Chinese market and to leverage our global enterprise for greater efficiencies," said Whirlpool Chairman and CEO Jeff Fettig.
to Daily News