Arcelik Asked by UK Regulator to Offer Remedies Over Whirlpool Deal Concerns

By Dominic Chopping

The U.K. Competition and Markets Authority said Thursday it will refer Arcelik's planned merger of one of its units with Whirlpool's European major appliances business for an in-depth phase 2 probe, unless the company offers to remedy competition concerns.

Whirlpool said in January that it had agreed to sell its Middle East and Africa business to Arcelik.

In addition, Whirlpool said that it was merging its European major domestic appliance business into a new jointly owned company with Arcelik, which would contribute its major domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses.

The regulator said it has found that the deal gives rise to a realistic prospect of a substantial lessening of competition in the supply of washing machines, tumble dryers, dishwashers and cooking appliances.

Arcelik is a global supplier of a broad range of home appliances and consumer electronics, including the Beko and Grundig brands, while Whirlpool is a supplier of a full line of domestic appliances, including the Hotpoint and Indesit brands.

The CMA found that, should the deal go ahead, the merged company will be the largest individual supplier of washing machines, tumble dryers, dishwashers and cooking appliances - a market worth over 3.8 billion pounds ($4.61 billion) in the U.K.

"Arcelik and Whirlpool's position is particularly strong in the low to mid-range price categories of these domestic appliances, where they would face competition from only a small number of competitors," the regulator said.

"The CMA is concerned that this lessening of competition may result in higher prices or a reduction in choice or quality for customers."

The regulator said it found the deal wouldn't give rise to a realistic prospect of a substantial lessening of competition in the supply of refrigerators and freezers in the U.K., but it has given the parties until Oct. 5 to offer a remedy to its other concerns.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

September 28, 2023 03:10 ET (07:10 GMT)

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