US appliance manufacturer Whirlpool Corporation has divested parts of its EMEA business and formed a new entity with Turkish manufacturer Arçelik.

Whirlpool Corporation global headquarters

The new business will include the Whirlpool European major domestic appliance (MDA) business and Arçelik MDA, consumer electronics, air conditioning and small domestic appliance business.

It is expected to have combined sales of over $6billion and the combined businesses are forecast  to generate cost synergies of more than $200million.

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Whirlpool will own 25% of the newly formed entity, while the remaining 75% will belong to Arçelik.

The new business has yet to be named and it will be agreed in the second half of 2023.

Director of UK communications and government relations at Whirlpool corporation Ian Moverley commented: “The new company will bring together the best of the two complementary companies to deliver value to consumers through attractive brands, sustainable manufacturing, product innovation, and consumer services.”

He explained: “Ownership of the Hotpoint, Indesit, Bauknecht, Privileg, and Ignis brands will be transferred to the newly-formed company.

“The newly-formed company will have a multi-year license to sell Whirlpool-branded MDA products in Europe.”

However, Moverley added: “The KitchenAid (SDA & MDA), Maytag and InSinkErator businesses will continue to be owned and operated by Whirlpool.”

Separately, Whirlpool agreed in principle to the sale of Whirlpool’s Middle East and Africa business to Arçelik.

Commenting on the announcement, chairman and chief executive officer of Whirlpool Corporation Marc Bitzer said: “Today’s announcement marks yet another major and important milestone in our ongoing portfolio transformation.

“This allows us to participate in significant value creation from the repositioning of the business and cost synergies through our minority interest.”

The transaction is expected to close in the second half of 2023 and is subject to obtaining regulatory approvals and other customary closing conditions.

Until the closing of the transaction, Whirlpool’s European business will be included in the company’s results.

When asked what this will mean for Whirpool UK, Ian Moverley concluded: “It’s too early to speculate.

“Until the close of the transaction, it is business as usual and the two companies will continue to operate as separate entities.”