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Arcelik Whirlpool merger overview:
- Who: The UK’s antitrust authority has launched an investigation into the anticipated merger between Arcelik AS of Turkey and Whirlpool Corp.
- Why: The Competition and Markets Authority is assessing whether the merger will lessen competition in the UK market.
- Where: The Arcelik-Whirlpool merger is being investigated in the UK.
The UK’s antitrust authority has launched an investigation into the anticipated merger between two multinational household appliances manufacturers — Arcelik AS of Turkey and Whirlpool Corp. — as it seeks to determine whether the deal would weaken competition in Britain.
On Aug. 3, the UK Competition and Markets Authority (CMA) said it had officially launched its merger inquiry by notice to the two companies.
In January, the U.S. company Whirlpool announced it was folding its European arm of the business into the new company controlled by its former rival Arcelik, Reuters reported.
Arcelik and Whirlpool — which both make electronic goods and home appliances such as refrigerators and washing machines — have not disclosed the financial terms of the agreement.
Merger proposal follows European review
The move comes after Whirlpool launched a review of its Europe, Middle East and Africa operations in April 2022.
After the review, it said it planned to focus on higher margin businesses, and brokered the deal with Arcelik.
High energy costs and slow growth have led to a number of global firms exiting the European market, Reuters reported. At the same time Turkish exporters gained an advantage from a drop in the value of its currency, the lira, making goods cheap to produce in the country and cheaper for European buyers. This could make it harder for British companies to compete in the domestic market.
“The CMA is considering whether it is, or may be, the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation,” the competition watchdog said.
“And, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the U.K. for goods or services.”
The CMA said it will decide by Sept. 29 whether to refer the deal to an in-depth phase two investigation.
The deal is expected to close in the second half of 2023, although it requires approval by regulators.
Arcelik’s Netherlands subsidiary, Ardutch BV, will own 75% of the newly formed company and Whirlpool will hold the remaining 25% under the structural terms of the proposed deal.
Meanwhile, in June, Whirlpool Corporation was hit with a class action lawsuit alleging it fails to disclose to consumers the risk of pollutants associated with the use of KitchenAid, Whirlpool, and other brands of gas stoves, ovens, and range products it makes, sells, and markets.
What do you think of the proposed merger between Whirlpool and Arcelik? Let us know in the comments!
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