Whirlpool Wants a Chinese Subsidiary
Benton Harbor, Mich.-based Whirlpool is expanding its business in China -- but this time, it's not "exporting American jobs" to do it.
On Tuesday, the home-appliances giant announced that it has agreed to take over a stake in the Hefei Rongshida Sanyo Electric, currently owned by Panasonic subsidiaries Sanyo Electric and Sanyo Electric (China). In a two-step process, Whirlpool will first buy all shares owned by the two "Sanyos," then buy additional shares directly from Hefei via private placement. (I.e., Hefei will issue new shares and sell them directly to Whirlpool, without offering them for sale more generally to all potential buyers).
Whirlpool estimates its total cost for these transactions will be $552 million cash. Regulators permitting, and Hefei shareholders approving, Whirlpool expects to close the transactions, and become a 51% owner of Hefei, by the end of next year. Whirlpool expects the transaction will then become profitable for it within a year after taking its stake.
Whirlpool is specifically targeting the Chinese market with this purchase. In a statement, Whirlpool explained that its primary purchase in buying the Hefei stake is to "give Chinese consumers a broader range of innovative, high-quality products through our combined trusted portfolio of brands."
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