CMA flags concerns over Whirlpool-Arcelik deal

(Sharecast News) - The UK competition watchdog has warned that the planned merger of white goods manufacturers Whirlpool and Arcelik could reduce choice.

Turkey's Arcelik, which owns the Beko and Grundig brands, agreed at the start of the year to acquire the European business of America's Whirlpool, which owns Hotpoint and Indesit.

At the time, Arcelik said the combination would "drive value creation for employees, shareholders and European consumers of white goods".

But on Thursday, the Competition and Markets Authority said it believed the deal could reduce choice. The combined company will be the largest individual supplier of washing machines, tumble dryers, dishwashers and cooking appliances, a market that is worth more than £3.8bn in the UK.

Sorcha O'Carroll, senior director of mergers at the CMA, said: "The proposed deal will combine two major providers of home appliances in the UK, meaning that well-known brands such as Hotpoint, Indesit and Beko will sit under one owner. We're worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers.

"As competition from other suppliers in the low-mid price ranges appears limited, we are concerned that this tie-up could leave people paying more or receiving lower quality products.

"Unless Arcelik offers a solution to address our concerns, we'll move to an in-depth investigation."

Arcelik and Whirlpool now have until 5 October to respond to the CMA's concerns.

Under the terms of the deal as it currently stands, Arcelik and Whirlpool will set up a new business compromising of the two firm's European units. Arcelik, which employs around 45,000 people in 53 countries, would own 75% of the new company and Whirlpool the remainder.

Arcelik, part of Turkish conglomerate Koc Holding, was not immediately available for comment.