A formal agreement has been reached for Whirlpool to purchase rival Maytag for a total purchase price of $1.7 billion. The purchase price comes to $21 per share plus Whirlpool will assume approximately $977 million of Maytag's debts.
An earlier deal between Maytag and Ripplewood Holdings has fallen through. Ripplewood declined to up it's bid.
'We have carefully considered all our options and concluded that it is not in the best interests of Ripplewood and our investor group to match Whirlpool's offer or submit a new bid for Maytag,' said Timothy C. Collins, chief executive officer of Ripplewood, in a statement. 'We express our hope that Maytag, its shareholders, employees and the communities of which it is a part are well served by its agreement with Whirlpool and we wish them well.'
Maytag paid a $40 million cancellation fee which Whirlpool has agreed to pay back to Maytag.
Federal regulators still have to approve the purchase of the nation's third largest appliance manufacturer (Maytag) by the largest manufacturer (Whirlpool). Experts say the deal will take as many as nine months to complete as regulators examine the far reaching implications of the purchase.
Jeff Fettig, the CEO of Whirlpool said the purchase will benefit consumers.
In a statement, Fettig said, 'This transaction will enable us to achieve significant efficiencies and better asset utilization. It will also allow us to offer a wider range of products to a much broader consumer base.'
