CMA weighs probe of Whirlpool’s merger with Turkey’s Arcelik

The British competition authority is considering an investigation into the proposed merger between Whirlpool and a company owned by Turkey’s largest industrial conglomerate.

The Competition and Markets Authority (CMA) said Arcelik’s planned takeover of Whirlpool’s European home appliances division could lead to higher prices and lower quality products for consumers.

Unless Arcelik sufficiently addresses its concerns, the watchdog warned, it would open a comprehensive investigation into the deal.

Istanbul-based Arcelik, owned by Koç Holding, is one of Europe’s largest home appliance sellers, and the Beko brand is particularly popular among British customers.

In January, the group’s Ardutch subsidiary agreed with Whirlpool to merge their European operations into a new standalone company.

Arcelik will have a 75 percent stake in the new joint venture, while Whirlpool, whose brands include Hotpoint and Indesit, will control the remaining 25 percent.

If the partnership goes ahead, which is expected sometime later this year, the companies expect to generate more than €200 million in cost synergies.

The newly expanded company is also likely to have more than 20,000 employees across Europe, a combined annual turnover of almost €6 billion, and an annual production capacity of around 24 million white goods.

In addition, it would be the largest individual supplier of tumble dryers, dishwashers, washing machines and cooking appliances in Britain – a market worth more than £3.8 billion.

However, the CMA said the two companies’ collective dominance in the low to mid-range price categories of these particular devices would mean a “small number” of competitors.

“We are concerned that this could limit the choice of suppliers available to retailers and ultimately to shoppers,” said Sorcha O’Carroll, the CMA’s senior director of mergers.

“As competition from other suppliers in the low to mid-range segment appears limited, we are concerned that this collaboration could result in people paying more or receiving lower quality products.

“Unless Arçelik provides a solution to address our concerns, we will proceed with an in-depth investigation.”

The company has until October 5 to respond to the competition authority. European antitrust regulators are also analyzing the cooperation and are expected to make a decision on October 23.