Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC approves acquisition of appliance producer Indesit by Whirlpool, (Oct 14, 2014)

By Linda O’Brien, J.D., LL.M.

The European Commission (EC) announced yesterday that it has cleared under European Union (EU) merger regulations the proposed acquisition of the Italian major domestic appliances manufacturer Indesit Company S.p.A. ('Indesit') by Whirlpool Corporation ('Whirlpool'). The Commission was notified of the transaction on September 8, 2014.

Both companies manufacture and supply major domestic appliances ('MDAs'), including refrigerators, freezers, cooking appliances, dishwashers, washing machine dryers, and microwave ovens. In addition, Whirlpool manufactures refrigeration compressors used in refrigerators and freezers. The Commission concluded that the transaction would not raise competition concerns, given that many alternative MDA suppliers exist in the European Economic Area (EEA) and at a national level.

Both Whirlpool and Indesit produce all types of MDAs and are active in various EU Member States. However, the EC found that the parties were not particularly close competitors and the combined entity would continue to face significant competition from a number of strong European companies—such as Electrolux, BSH, Candy, and Míele—as well as other rapidly-growing competitors such as Arcelik of Turkey and Samsung and LG of South Korea. Therefore, customers would still have sufficient alternative suppliers in all MDA categories.

The transaction also creates a vertical relationship in the market for refrigeration compressors, which are produced by Whirlpool and used as an input in the production of refrigerators and freezers. However, the Commission found that the merged entity's market share in refrigeration compressors will remain moderate after the merger and a number of alternative compressor suppliers will remain on the market, including competitors such as Secop, Huayi/Jiaxipera, LG, and Samsung.

Whirlpool is a U.S. company that manufactures and markets a full line of major appliances and related products, primarily for home use. Whirlpool’s principal products are major domestic appliances ('MDAs'). In the EEA, Whirlpool markets and distributes MDAs primarily under the Whirlpool, Bauknecht, Ignis, Maytag, Laden, Polar, and Privileg brands.

Indesit is a joint-stock company listed on the Italian Stock Exchange almost exclusively active in the production and sale of MDAs. In the EEA, Indesit markets and distributes its products under the Indesit, Hotpoint / Hotpoint-Ariston and Scholtès brands.

Companies: Indesit Company S.p.A.; Whirlpool Corporation

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