* Arcelik and Grundig to merge
* Arcelik to make 250 mln lira rights issue
* Arcelik to sell financial shares for 250 mln lira
* Grundig stock up 12.1 pct, Arcelik unchanged
(Adds analyst comments, further details, background)
By Daren Butler
ISTANBUL, Feb 27 Turkish durable goods maker Arcelik and its television-manufacturing unit Grundig Elektronik GRUND.IS have decided to merge in order to increase their competitiveness, the companies said on Friday.
Arcelik also unveiled plans for a major rights issue and sale of non-core financial assets in a restructuring process as the global crisis eats into Turkey's export and domestic markets.
Shares in Grundig were 12.1 percent higher at 0.65 lira at 1327 GMT, off a high of 0.68, bringing gains over the last two days to 35 percent. Arcelik shares were unchanged at 1.75 lira.
"The company decided to take a series of restructuring (measures) to increase its weight in the sector and benefit from the new opportunities in the best way possible," Arcelik said in a statement.
Turkey's economy, which grew at annual rates of around 7 percent in the wake of a 2001 financial crisis, slowed sharply last year and annual growth amounted to just 0.5 percent in the third quarter, raising the spectre of recession this year.
The companies are both part of the Koc Holding (KCHOL.IS) conglomerate. Arcelik currently holds 83 percent of Grundig.
Arcelik announced that it was raising its capital to 649.9 million lira ($382) from 400 million lira in a rights issue. It did not provide details on the issue. The company currently has a market value of 728 million lira.
Grundig currently has a market capitalisation of 237 million lira.
"Such a rights issue was inevitable for improving its balance sheet and cash flow. However, in the short-term the rights issue might be perceived negative for shareholders," said Oyak analyst Cemal Demirtas.
Arcelik also said it was selling shares in finance company Koc Finansal Hizmetleri (KFS) to other Koc group companies for 250 million lira.
Koc Holding said it was buying 201.6 million lira of these shares. The remaining 48.4 million lira in shares were being sold to a company called Temel Ticaret.
Arcelik will book a 72.7 million lira one-off profit from the transaction.
"We particularly deem the sale of KFS shares positively, which is a partial divestiture of a non-core asset for Arcelik," said Ata Invest analyst Erman Tutuncuoglu.
Grundig announced in December that it had cut its workforce by 25 percent in response to shrinking domestic and international markets, making 432 staff redundant in a move which also reflected seasonal demand fluctuations.
"Such a restructuring was inevitable, considering its high net debt level of $2.5 billion. A sum of 500 million lira cash injection will help to cut its net debt level to 2.2 billion," Demirtas said.
The companies have yet to release results for 2008. In 2007, Grundig had revenue of 1.356 billion lira and a pretax loss of 93.5 million lira. Exports, virtually all to Europe, accounted for 73 percent of its sales.
In the third quarter of last year, Arcelik's consolidated net profit tumbled to 240,000 lira from 65.68 million a year earlier.
Arcelik will announce its fourth-quarter results after the market close on Monday. ($1=1.7005 lira) (Editing by Simon Jessop)