Buyout PE groups like KKR, TPG, EQT, Bain, as well as Havells and Reliance Industries, had expressed interest in acquiring home appliance maker Whirlpool India. However, only Advent International remains in the race. A deal between the two companies could be reached soon.
New Delhi: Home appliances maker Whirlpool India is up for sale. According to an ET report, US private equity firm Advent International is close to acquiring a majority stake in the company. Whirlpool, a manufacturer of home appliances such as washing machines, KitchenAids, and refrigerators, is seeking to reduce costs and focus on more profitable products like blenders and coffee makers in large markets like the US. Buyout PE groups like KKR, TPG, EQT, and Bain, as well as Havells and Reliance Industries, have also expressed interest.
Sources indicate that Advent International and Whirlpool India’s parent company, Whirlpool Corporation, are in the final stages of negotiations. Advent wants to acquire a 31% stake. Sources indicate that the deal could be finalised by the end of this year. Under Indian regulations, this share purchase will trigger an open offer for an additional 26% of the company’s shares. If the offer is fully subscribed, Advent will own 57% of the company.
Parent company’s shareholding
The total value of this deal will be Rs 9682.88 crore at current market prices. This will leave Whirlpool Corporation with a minority stake in the company, holding less than a quarter of the company. This will be Advent’s third major acquisition in the appliances sector in India. Previously, since 2015, Advent has acquired Crompton Greaves’ consumer electrical business and Eureka Forbes.
An official involved in the deal said final due diligence and paperwork are underway. Two other major private equity firms, Bain and EQT, were also interested in the deal but later backed out. However, some recent corporate developments have renewed Advent’s interest in the business. Emails sent to Whirlpool Corp. and Whirlpool India remained unanswered as of Sunday evening.
stock movements
If negotiations with Advent also fail, the company may consider selling some of its equity through a block deal. Whirlpool India shares have fallen 26% so far this year. The company’s recent results show its lowest revenue in the last seven quarters, indicating operational challenges in India. Although sales in the US increased 1% in the third quarter, profits declined due to a non-cash loss.
On Friday, Whirlpool India shares closed flat at ₹1,338.95 per share on the BSE. At this price, the company’s market cap was ₹16,987.50 crore. On October 22 last year, the company’s share price reached a high of ₹2,449 crore, but has since declined. Whirlpool Corporation holds a 51% stake in Whirlpool India. Whirlpool is one of the top four refrigerator and washing machine brands in India. It is mainly present in the premium segment, which is currently dominated by LG and Samsung.
