Whirlpool / Arçelik: update

The 75/25 division is only a hypothesis, to be confirmed on the basis of the 2022 financial statements. The new company will be able to use the Whirlpool brand on its products for 40 years. Whirlpool assets in Africa and the Middle East sold for just 20 million

Whirlpool / Arçelik: two or three things we didn't know

From left: Fatih Kemal Ebiçlioğlu, Consumer Durables Group President of Koç Holding, Marc Bitzer, Whirlpool Cooperation CEO, Hakan Bulgurlu, Arçelik CEO

While the Stock Exchanges gave their judgment on the operation, making Arçelik’s shares rise by 9% in Istanbul and those of Whirlpool in New York by 0.4%, new details emerge from a press release  by Arçelik on the fate of Whirlpool Emea’s activities.

Object of the agreement: The agreement includes Whirlpool’s 38 European subsidiaries and 9 manufacturing sites in Italy, Poland, Slovakia and the United Kingdom, as well as Arçelik’s 2 manufacturing plants in Romania and its 25 European subsidiaries. Together, this will translate into a production capacity of approximately 24 million white products annually.

Contractors . Shareholders in the new company are Whirlpool Emea Holdings LLC and Arçelik’s wholly owned subsidiary Ardutch , a Dutch holding company through which Arçelik controls its European operations. The deal will see both Ardutch and Whirlpool transfer their European subsidiaries to the new company Division of shares. After these transfers, it is expected that 75% of the new company will be assigned to Ardutch BV and 25% to Whirlpool. The final ownership ratio post-closing will be determined taking into account the respective 2022 EBITDA, net asset values, net debt and net working capital of the parties.

Size and brand portfolio. The new business is expected to have more than 20,000 European employees. The combined net sales of the Arçelik and Whirlpool subsidiaries are approximately €6 billion, based on the net sales of the companies’ European operations in 2021. The new company will manufacture, sell and provide after-sales services for branded home appliances (including refrigerators , washing machines, vacuum cleaners, etc.) offering consumer choice across a range of Arçelik brands, including Grundig, Arctic, Elektrabregenz, Flavel and Leisure, alongside Whirlpool’s existing brands Indesit, Hotpoint*, Ignis, Privileg and Bauknecht. The company will have regional trademark rights to Arçelik’s Beko, Blomberg and Altus brands and Whirlpool Corporation’s Whirlpool brand for a period of 40 years.The sale of the Whirlpool businesses in Africa and ME. Separately, the parties also agreed to sign a stock purchase and sale agreement within six weeks for Whirlpool to divest its Middle East and North Africa (MENA) portion of the EMEA region to Ardutch (and therefore not to the new company), for a cash amount of 20 million euros. The transaction, when completed, would result in Ardutch acquiring full ownership of two additional Whirlpool subsidiaries located in the United Arab Emirates and Morocco.The comment of Arçelik’s group leader. Levent Çakıroğlu , CEO of Koç Holding (the parent company of Arçelik), commented, “ As Turkey’s largest industrial conglomerate, we continue to strengthen our impact with global success stories ranging from the UK to India, from South Africa to the United States. Today, Koç Group companies export to more than 150 countries. Arçelik, as a respected player in his industry, is taking his vision and ambitions forward with this new independent business. The opportunity for this business to deliver value to European consumers with market leading products through trusted brands and a commitment to sustainability in the home is significant. ”

Appliance giant Arcelik bets on China, says company CEO

The CEO of Arcelik, one of the world’s biggest home appliance makers, told Xinhua recently that China is a bright spot for business amid global recession fears and an increasingly gloomy market outlook.

Speaking of the present headwinds against the world economy, Hakan Bulgurlu said, “we will have to go through a lot of pain before it gets better.”

China, however, is “a little bit of a different picture,” he said in a video interview with Xinhua.

Established in 1955, Arcelik is a Turkish multinational household appliances manufacturer headquartered in Istanbul. With 45,000 employees, its global operations include subsidiaries in 53 countries, 30 production facilities in nine countries.

Arcelik’s domestic sales in China have grown by roughly 80 percent in 2022.

“I find China one of the more promising places to be in the future. It has always been the factory of the world, and I think it will continue to be the factory of the world,” said Bulgurlu.

“The world economy has significantly slowed down, and we are facing a recession on many fronts,” said the Turkish businessman, who had lived in Hong Kong for 13 years.

Calling himself “a big fan” of China and Asia, Bulgurlu said he is optimistic about the business performance in the future Chinese market. “I think demand for appliances continues. We want to continue investing in China to actually bring our brands in.”According to Bulgurlu, four product groups, namely heating and cooling, refrigeration, lighting and electric motors, consume about 40 percent of all power. Many current technologies have made these production much more efficient.

“We need global regulations to make us use the best available technologies in all of these product groups to reduce power consumption,” he said.

Regarding the upcoming COP27 meeting, he said “I hope to make some progress and talk not only with policymakers but other CEOs as well.”

“I actually admire China in the sense that when China makes a decision, it follows through very, very fast,” Bulgurlu said.

New president of APPLiA –

Arcelik’s CEO, Hakan Bulgurlu, has been elected as the new president of APPLiA – Home Appliance Europe, the Brussels-based association representing home appliance manufacturers in Europe.

Since 2015, Hakan Bulgurlu has been CEO of Arcelik. He is also a member of the World Economic Forum’s CEO Climate Leaders Alliance and the Amstel Dialogues, an initiative that aims to foster innovation in Europe.

Taking over the presidency from Dr. Peter H. Göetz, Executive VP of BSH Europe and outgoing APPLiA President, Bulgurlu addressed the members of the Association during the APPLiA General Assembly in Sofia. In his commencement speech, Bulgurlu shed light on the great progress made by the sector over the past years. “Commitment and dedication have been the key drivers behind Dr. Göetz’s term, and the scene is now set for a successful cooperation,” he said. Amid the shift to a post-pandemic era and Europe’s economic recovery, the industry is called to face the cross-cutting effects of the impending geopolitical challenges, affecting millions of lives and sectors across Europe and the wider world. This is further aggravated by one of the most pressing issues faced by humankind: climate change. The subsequent increased levels of energy insecurity that come with it call for a prompt energy transformation. “As an Association, we have a huge responsibility in advancing the set energy efficiency goals, to leave our children a better planet,” pointed out Arcelik’s CEO. In this regard, the role of the young generations is crucial “as the present issues will directly affect the lives of the consumers of tomorrow,” he highlighted. This surely represents a challenge, but also a great opportunity, for the home appliance sector to capitalise on the successes achieved so far and continue to actively shape the energy transition.