U.S. home appliances maker Whirlpool Corp said on Tuesday it would divest most of its businesses across Europe, Middle East and Africa (EMEA) as part of a strategic review it launched last year.
The home appliance maker launched a review of the EMEA business in April 2022, acknowledging that it would take the company a longer time to achieve attractive EBIT margin levels amid geopolitical tensions in Europe.
Whirlpool will form a new Europe-focused entity with Turkish household appliances manufacturer Arcelik (ARCLK.IS) by divesting its major domestic appliance business in the region, it said in a statement.
The new entity will include Arcelik’s European units such as major domestic appliance, small domestic appliance and consumer electronics. Whirlpool will own 25% of this new entity, while Arcelik will have the rest, the U.S.-based company added.
The combined entity is expected to have annual sales of 6 billion euros and likely to have more than 20,000 employees across multiple European countries.
The transaction will negatively impact Whirlpool’s full year earnings per share by $26 to $28 on a GAAP basis, the company said, adding that it recorded a non-cash charge of about $1.5 billion for the write-down of its EMEA business in fourth quarter.
Whirlpool will retain ownership of its EMEA KitchenAid unit, it said.
Separately, Whirlpool also said it would sell its Middle East and Africa business to Arcelik, which the Turkish company said was for a cash amount of 20 million euros ($21.65 million).
Whirlpool added that the divested businesses had sales of around $4.2 billion in 2021. The entirety of Whirlpool’s EMEA business reported sales of $5.01 billion last year.
Source: Reuters.com