Mexico's Mabe buys BSH Bosch's Brazil appliance unit

SAO PAULO, July 1 (Reuters) - Mexican home appliances maker Mabe said on Wednesday it agreed to acquire the Brazilian unit of Germany's BSH Bosch for an undisclosed amount, betting on a market being bolstered by tax cuts and resilient consumer demand.

Mabe Chief Executive Luis Berrondo plans to make a formal announcement later on Wednesday in Sao Paulo, a company spokesman told Reuters. With the acquisition of BSH Bosch Continental, Mabe will become the second-biggest home appliance maker in Brazil by revenue.

This week, President Luiz Inacio Lula da Silva renewed tax breaks for purchases of home appliances until October as part of a broader effort to revive industrial production and pull the $2 trillion economy out of a recession.

The renewal of the tax breaks, which the government said have proven to be effective in bolstering the economy, might allow home appliance retailers to further lower prices.

Under the acquisition agreement, Mabe will produce Bosch appliances under a franchise for a limited time and will distribute imported products from Bosch, the German company said in a statement.

Before the acquisition, BSH Bosch had a 9 percent market share in Brazil and Mabe, which sells under the brand name Dako, had a 16 percent share.

Whirlpool is the largest producer of refrigerators, stoves and other home appliances in Brazil, with a market share of 16 percent. (Reporting by Alberto Alerigi Jr, Writing by Guillermo Parra-Bernal; Editing by Maureen Bavdek)