Rumours are swirling that Bosch are looking to acquire Whirlpool in a multi-billion dollar deal which would create another mega appliance group.
Neither Whirlpool or Bosch have officially commented on these reports as yet but given the widespread reports now coming in and Reuters being the original source, it’s hard to imagine that there’s not something in this story.
The price tag for Whirlpool presently is about $4.8 billion.
It is important to note that at this stage it is not certain that any offer will be made.
Whirlpool has been moving into small appliances, but it’s also recently announced job cuts of about 1000 people in a bid to reduce costs in order to improve margins, and its value has dropped by about 50% in recent years.
In Europe, this would possibly be complicated and means that we have no idea how it would affect the recent Beko deal with Whirlpool where Whirlpool has a 25% stake in the new joint venture as previously reported. Of course, that is if this even happens.
If this does go ahead it’s likely to be weeks if not months before we know any more and, we don’t know how far advanced any talks are given that neither party is making any comment on the matter.
Should it proceed, however, it does create another behemoth of an appliance producer, further reducing the count of actual manufacturers left worldwide. In recent years many of the smaller players have been acquired and subsumed into larger groups, especially with Chinese companies like Haier and Hisense picking up many European brands. It is possible that Bosch sees this deal as a way to counter that expansion by Chinese competitors.
Whilst initially, this is pretty shocking news, one of those “who would have thought that…” ones, on reflection, it’s not entirely surprising.
The choices for consumers would be diminished more should this happen, as the industry is now utterly dominated by a mere handful of monumentally huge groups, and the chances of new entrants are low given the high entry costs and low margins.
On the other hand, the scale of these operations keeps costs low to consumers.
What is better we guess depends on your point of view but there seems little doubt that in order to compete in the modern appliance market you need pretty huge scale in order to do so.
