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UK’s Competition and Markets Authority announced that it has found that Arçelik’s anticipated purchase of Whirlpool Corporation’s (NYSE:WHR) major appliances business in Europe could reduce choice in the supply of washing machines, tumble dryers, dishwashers and cooking appliances.
The CMA determined that if the deal were to proceed, the merged company would be the largest individual supplier of washing machines, tumble dryers, dishwashers and cooking appliances, which was noted to be a market worth over £3.8B in the UK. Arçelik and Whirlpool’s (WHR) position was noted to be particularly strong in the low to mid-range price categories of the domestic appliances, where it is said it would face competition from only a small number of competitors. The CMA said it is concerned that this lessening of competition may result in higher prices or a reduction in choice or quality for customers.
“The proposed deal will combine 2 major providers of home appliances in the UK, meaning that well-known brands such as Hotpoint, Indesit and Beko will sit under one owner. We’re worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers,” warned CMA Senior Director of Mergers Sorcha O’Carroll.
CMA said the transaction will be referred for an in-depth Phase 2 investigation unless Arçelik offers to take measures to address the regulator’s concerns.
Arçelik agreed to acquire Whirlpool’s (WHR) EMEA Major Domestic Appliances Business last January pursuant to a contribution agreement, under which Arçelik would set up a new standalone business, Beko Europe B.V.
Shares of Whirlpool (WHR) traded flat in the premarket session at $130.63. For the year, Whirlpool (WHR) is down about 7.7%.