BENTON HARBOR, Mich.,
April 24, 2018 /PRNewswire/
-- Whirlpool Corporation (NYSE: WHR) announced today that it
has entered into an agreement to sell the Company's Embraco
compressor business to Nidec Corporation for a cash purchase price
of $1.08 billion, subject to
customary working capital and indebtedness adjustments. The
transaction is expected to close in early 2019, subject to
regulatory approvals and other customary closing conditions.
"We are proud of our strong portfolio of global consumer brands.
Since Embraco operates in the business-to-business space, this
transaction enhances our strategic focus on investing in and
growing our consumer-facing business," said Marc Bitzer, chief executive officer of
Whirlpool Corporation. "The planned tender offer further
demonstrates our commitment to returning capital to shareholders,
consistent with our balanced capital allocation strategy."
Embraco Business Overview and Transaction Details
Headquartered in Brazil,
Embraco has been a Whirlpool majority-owned business unit since
1997. The business has a workforce of approximately 11,000
employees across eight global manufacturing facilities located in
Brazil, Italy, China,
Slovakia and Mexico. Embraco also maintains commercial
offices in the United States and
Russia.
The Embraco business is currently reported as part of Whirlpool
Corporation's Latin America
segment. In fiscal year 2017, Embraco contributed approximately
$1.3 billion to Whirlpool's net sales
with margins approximating the segment average.
The transaction is not expected to have a material impact on
Whirlpool Corporation's 2018 financial results.
As previously announced, Whirlpool expects to cease operations
and end production at Embraco's Italy facility, which is subject to a separate
agreement with local authorities and unions. Therefore, the Embraco
Italy facility is not included in the sale to Nidec
Corporation.
"Nidec has been a trusted supplier for decades, and we look
forward to building on that relationship in the future," said João
Carlos Brega, president of Whirlpool
Latin America. "Embraco will continue to be a highly-valued
supplier to Whirlpool, and we expect Embraco's customers and
employees to thrive under Nidec's ownership in the future."
Citigroup Global Markets Inc. acted as exclusive financial
advisor, and Linklaters LLP and Cleary, Gottlieb, Steen and
Hamilton LLP acted as legal advisors for Whirlpool.
Planned Tender Offer
Whirlpool Corporation intends to launch a "modified Dutch
Auction" tender offer for up to $1
billion of its common stock at an anticipated price per
share not less than $150 and not
greater than $170, subject to market
conditions. The tender offer is expected to launch on April 26, 2018.
The Company has arranged committed financing in an amount
approximating the net proceeds from the Embraco transaction and,
consistent with the Company's balanced approach to capital
allocation, intends to use the proceeds of the financing to fund
the tender offer under the Company's existing share repurchase
authorization. The Company expects to repay the financing amount
with the proceeds from the sale upon closing of the Embraco
transaction.
Subsequent to the completion of the tender offer, the Company
intends to opportunistically execute open market share repurchases
throughout 2018. Share repurchases had previously been suspended
since the end of 2017 pending the completion of the Embraco sale
process and related negotiations.
About Whirlpool Corporation
Whirlpool Corporation (NYSE: WHR) is the world's leading major
home appliance company, with approximately $21 billion in annual sales, 92,000 employees and
70 manufacturing and technology research centers in 2017. The
company markets Whirlpool, KitchenAid, Maytag, Consul, Brastemp,
Amana, Bauknecht, Jenn-Air, Indesit and other major brand names
in nearly every country throughout the world. Additional
information about the company can be found at WhirlpoolCorp.com, or
find us on Twitter at @WhirlpoolCorp.
About Embraco
Embraco is a global company that promotes quality of life
through innovative cooling solutions. With eight plants and
two commercial offices, the company has approximately 1,700 patents
granted and is present in over 80 countries showcasing technologies
that advance high performance and energy efficiency. Embraco
provides cooling solutions for household, commercial, medical,
retail applications, and aftermarket segments. Through partnerships
with startups and digital services, it also delivers value and
intelligence to its customers. Additional information is available
at: www.embraco.com.
About Nidec Corporation
Nidec was founded in Kyoto,
Japan 45 years ago by four engineers and has since grown
into a leading comprehensive motor manufacturer encompassing
approximately 300 subsidiaries employing over 100,000 people
throughout the world. After becoming the first company in the world
to successfully commercialize a direct drive spindle motor for HDDs
using brushless DC motor technology, the company branched off into
the appliance component market which now constitutes one of its
fastest growing business segments. In 2017, Nidec's Global
Appliance Division also acquired the Secop Group, a leading
European manufacturer of refrigeration compressors.
Additional information is available at: www.nidec.com.
Whirlpool Corporation Additional Information
This document contains forward-looking statements, including
statements regarding transaction closing timelines and benefits,
amount and use of anticipated transaction proceeds, and tender
offer timing and share repurchase expectations. Actual events or
results may differ materially from those statements as a result a
many factors, including the company's ability to complete any sale
or other transaction and the company's ability to execute on its
accelerated share repurchase strategies. For information about the
factors that could cause such differences, please refer to our
Annual Report on Form 10-K for the year ended December 31, 2017, including the information set
forth under the caption "Risk Factors."
Website Disclosure
We routinely post important information for investors on our
website, whirlpoolcorp.com, in the "Investors" section. We intend
to use this webpage as a means of disclosing material, non-public
information and for complying with our disclosure obligations under
Regulation FD. Accordingly, investors should monitor the Investors
section of our website, in addition to following our press
releases, SEC filings, public conference calls, presentations and
webcasts. The information contained on, or that may be accessed
through, our webpage is not incorporated by reference into, and is
not a part of, this document.
Additional Information Regarding the Tender Offer
The tender offer described in this press release (the "Offer")
has not yet commenced. This press release is for informational
purposes only. This press release is not a recommendation to buy or
sell Whirlpool common stock or any other securities, and it is
neither an offer to purchase nor a solicitation of an offer to sell
Whirlpool common stock or any other securities. On the commencement
date of the Offer, Whirlpool will file a tender offer statement on
Schedule TO, including an offer to purchase, letter of transmittal
and related materials, with the United States Securities and
Exchange Commission (the "SEC"). The Offer will only be made
pursuant to the offer to purchase, letter of transmittal and
related materials filed as a part of the Schedule TO. Stockholders
should read carefully the offer to purchase, letter of transmittal
and related materials because they contain important information,
including the various terms of, and conditions to, the Offer. Once
the Offer is commenced, stockholders will be able to obtain a free
copy of the tender offer statement on Schedule TO, the offer to
purchase, letter of transmittal and other documents that Whirlpool
will be filing with the SEC at the SEC's website at www.sec.gov or
from Whirlpool's website at www.whirlpoolcorp.com.
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SOURCE Whirlpool Corporation