Whirlpool To Sell Embraco Business To Nidec
Whirlpool Corp (WHR) said it has entered into an agreement to sell its Embraco compressor business to Nidec Corp. (NJDCY.PK) for a cash purchase price of $1.08 billion, subject to customary working capital and indebtedness adjustments. The transaction is expected to close in early 2019.
Whirlpool noted that the Embraco sale is consistent with the company's strategic focus on its consumer-facing business. The company also said it expects to execute share repurchases of about $1 billion in the form of a modified Dutch Auction tender offer.
"Since Embraco operates in the business-to-business space, this transaction enhances our strategic focus on investing in and growing our consumer-facing business. The planned tender offer further demonstrates our commitment to returning capital to shareholders, consistent with our balanced capital allocation strategy," said Marc Bitzer, chief executive officer of Whirlpool.
Whirlpool does not expect the transaction to have a material impact on its 2018 financial results.
The Embraco business is currently reported as part of Whirlpool's Latin America segment. In fiscal year 2017, Embraco contributed about $1.3 billion to Whirlpool's net sales with margins approximating the segment average.
Headquartered in Brazil, Embraco has been a Whirlpool majority-owned business unit since 1997. The business has a workforce of about 11,000 employees across eight global manufacturing facilities located in Brazil, Italy, China, Slovakia and Mexico. Embraco also maintains commercial offices in the United States and Russia.
Whirlpool also said it intends to launch a "modified Dutch Auction" tender offer for up to $1 billion of its common stock at an anticipated price per share not less than $150 and not greater than $170, subject to market conditions. The tender offer is expected to launch on April 26, 2018.
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