Whirlpool Will Sell Hoover, Jade Commercial, Dixie-Narco, Amana Microwave
May 23, 2006
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Whirlpool Corporation said today its merger with Maytag is expected to generate pre-tax annualized cost savings in excess of U.S. $400 million. Cost efficiencies are expected from all areas of the value chain, including product manufacturing, infrastructure and support areas, global procurement, and logistics. The company expects to gain the majority of efficiencies during 2007, and anticipates savings to be fully realized in 2008.
Whirlpool (Benton Harbor, Michigan, U.S.) will incur approximately $450 million in pre-tax, one-time costs to realize the annualized savings estimates. Approximately $150 million of these costs are expected to impact earnings over the next 3 years with the remainder capitalized under purchase accounting.
The company's previous estimated cost savings were $300-to-$400 million with one-time costs of $350-to-$500 million.
"Our increased savings estimates further demonstrate the value creating opportunity of this acquisition. The actions we have recently announced, including the consolidation of laundry production into our Clyde and Marion, Ohio, facilities, will represent a significant portion of our expected annualized savings," said Jeff M. Fettig, Whirlpool's chairman and CEO. "We have moved quickly to integrate the Maytag business since closing the transaction 7 weeks ago and we are pleased with our progress to date."
Businesses For Sale
Whirlpool also announced its decision to sell off several businesses that came with the Maytag purchase, and Fettig says the sales will allow Whirlpool to focus on its core appliance business. For-sale businesses include:
Dixie-Narco vending systems
Amana commercial microwave
Jade commercial products appliance businesses
"We have received strong interest from a number of potential buyers and anticipate completing these transactions by the end of this year," Fettig said.
Whirlpool also revised its guidance to reflect the integration of Maytag and now expects full-year 2006 earnings per diluted share from continuing operations of $6.00 to $6.25, compared to the pre-acquisition range of $7.00 to $7.25.
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