* Whirlpool offers 11 euros a share to buy 60.4 pct stake
* Will launch takeover bid for rest of Indesit
* Whirlpool keen to expand in Europe
* Indesit family had clashed over strategy-sources
(Adds context, shares, analysts)
By Agnieszka Flak and Elisa Anzolin
MILAN, July 11 Whirlpool, the world's
largest maker of home appliances, has agreed to pay 758 million
euros ($1 billion) to buy a 60 percent stake in smaller Italian
rival Indesit to further expand beyond its U.S. home
The deal is the latest in a string of buys by foreign
players of Italian companies battling against the country's
longest recession in 70 years.
The acquisition of Indesit, which is a market leader in
Italy, the United Kingdom and Russia, follows Whirlpool's
purchase of a majority stake in China's Hefei Rongshida Sanyo
Electric Co Ltd last year for $552
Family-controlled Indesit, which produces washing machines,
freezers and ovens, has been searching for eight-months for a
buyer that would help it reduce its dependence on Italy and
compete against cheaper products from eastern Europe and China.
The U.S. company has agreed to pay 11 euros a share in cash
to the members of the Merloni family who control Indesit and
will launch a bid for the rest of the company which is likely to
be delisted after the buyout, according to sources.
Analysts said Europe, where growth in several countries is
still very weak, is unlikely to boost Whirlpool's sales
near-term, but the purchase could offer cost synergies and help
margins, which are lower than Indesit's in the region.
Whirlpool says it is currently the fourth-biggest player in
Europe, Middle East and Africa, where it made 16 percent of its
$19 billion global sales last year.
"This will ideally position us for sustainable growth in the
highly competitive and increasingly global home appliance market
in Europe," Jeff M. Fettig, Whirlpool's CEO said in a statement.
The offer price represents a premium of 4.5 percent to
Indesit's close on Thursday. The stock rose as much as 3.5
percent on Friday on the back of the deal announcement.
The Merloni family began producing scales and other home
appliances in the 1930s and in 1987, under the leadership of
Vittorio Merloni, acquired the then bankrupt Indesit brand.
Under their ownership, Indesit expanded abroad, most notably
into Russia. But it was never able to make a mark beyond Europe.
There have disagreements in the family over strategy for the
company, sources close to the family have told Reuters.
The company posted a net loss in the first quarter, although
it remains profitable at operating level.
The Merlonis had been exploring options for their stake
since last year, while activist investor Amber has been pushing
for a tie-up with a foreign investor to boost the company's
Sources close to the situation told Reuters last month that
Electrolux and China's Sichuan Chaghong Electric,
were also interested in the Italian company.
But hours after the deal was announced, workers from the
left-leaning FIOM union expressed concerns.
"It is absolutely necessary that the government ... responds
immediately to a request for a meeting (with the unions) ... and
acts to avoid any negative impact on plants and jobs," union
leader Alessandro Pagano said in a statement.
Swedish rival Electrolux, the world's No.2 white
goods maker, has plants in Italy and has been negotiating for
months with workers and Rome to avoid shutting factories.
Indesit has eight industrial sites in Italy, Poland the
United Kingdom, Russia and Turkey and employs 16,000 workers.
The Group's main brands are Indesit, Hotpoint and Scholtes.
The combined 60.4 percent stake that Whirlpool is taking
over from the Merloni family represents a 66.8 percent voting
stake in the firm due to treasury shares held by Indesit.
Whirlpool said it plans to finance the deal, which it
expects to close by year end, through existing cash and debt.
($1 = 0.7345 Euros)
(Editing by Lisa Jucca and Elaine Hardcastle)