Whirlpool to buy 51% in China's Hefei Rongshida Sanyo Electric for $552 mn
13 Aug 2013
US home appliance manufacturer Whirlpool Corp today said that it would acquire a 51-per cent stake in Hefei Rongshida Sanyo Electric Co Ltd, a Chinese home appliances maker, for about 3.4 billion yuan ($552 million).
The Michigan-based company said that its subsidiary in China will acquire all shares currently owned by Sanyo Electric Co. Ltd. and Sanyo Electric Co. (China) Ltd., and purchase new Hefei Sanyo shares via a private placement.
Whirlpool will fund the acquisition with cash on hand or debt and expects the deal to close by the end of 2014.
Founded in 1994 and based in Hefei, Anhui Province, Hefei Rongshida Sanyo Electric is a joint venture between former Hefei Rongshida Group and Sanyo Electric and Sanyo Electric (China), a subsidiary of Panasonic Corporation.
The company's sells dishwashers, refrigerators, microwave ovens of Sanyo, Rongshida / Royal Star and Diqua brands.
The Shanghai Stock Exchange-listed company reported revenue of $636 million, EBIT of $51 million, EBITDA of $59 million, and net earnings of $48 million for 2012.
"Whirlpool has a strong presence in China's higher tier segments, this acquisition allows the company to build on, complement, and grow its position in the emerging Chinese market and to leverage our global enterprise for greater efficiencies," said Jeff Fettig, CEO and chairman of Whirlpool.
"As the leading global manufacturer and marketer of major home appliances, we will leverage the technology capabilities of Hefei Sanyo and provide the investments to enhance Hefei Sanyo's research and development and product innovation capabilities. This will give Chinese consumers a broader range of innovative, high-quality products through our combined trusted portfolio of brands," he added.
"Hefei Sanyo has an established nationwide distribution platform, a scaled manufacturing presence with opportunity for growth, and is ideally located in Hefei, a recognised appliance hub in China," said, Mike Todman, president of Whirlpool International.