Dressed to Chill: EQT, Bain Race for Whirlpool India

Time of India

5 days ago

Buyout groups EQT and Bain Capital are in a two-horse race for 31% controlling interest in Whirlpool of India, listed local arm of the US appliances giant, three senior industry executives said. Private equity peers TPG and KKR, as well as potential rival contenders Havells and Reliance Industries, have fallen back, they said.
EQT and Bain Capital are conducting detailed due diligence ahead of the deadline for a binding offer, said to be in August.
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Whirlpool didn't respond to queries sent to its US and India offices.
EQT and Bain declined to comment.
US parent Whirlpool Corp has been looking to sell a 31% stake in the India unit, which generates the bulk of its Asia revenue, while retaining 20%. The equity in India is held through Whirlpool Mauritius.
ET was the first to report June 20 on the interest of Reliance and Havells in the stake.
Whirlpool India's market cap was Rs 18,116 crore as of Tuesday's close on the BSE.
The India business monetisation exercise is part of a global reorganisation initiated at the end of 2022, when the company, known in the US for the Whirlpool, KitchenAid and Maytag brands, posted a $1.5 billion loss.
The company has said it's keen to raise net cash proceeds of $550-600 million (Rs 4,684-5,110 crore) from the 31% stake sale transaction by this calendar year. A formal stake sale process was launched in April by advisor Goldman Sachs.
A transaction will also trigger an open offer for an additional 26% stake in the company. As with several deal negotiations, Whirlpool's punchy valuations have been a deal spoiler for most potential suitors. Another bone of contention is said to be the royalty payout to the parent in future.
At the end of January, the stock plunged an exchange-allowed maximum of 20% to a near 10-month low when the company first announced its intent to pare ownership in India. It has rebounded since then. In April alone, the stock soared 33% after the sale process was launched. Since April, the stock has appreciated 29.39%, ending Tuesday at Rs 1,427.90 on the BSE, marginally down from Monday.
If fully subscribed, the incoming investor could end up owning 57% of the company. Public shareholders now own 49%. At current prices, this would translate into a deal worth Rs 10,354.62 crore, a slight premium to expectations, said the people cited.
If the US parent isn't happy with the final offers, it may once again divest through the open market route, analysts said. The parent sold a 24.7% stake in its Indian arm in February last year through block deals worth Rs 4,039 crore to institutional investors, led by five mutual funds including SBI Mutual Fund and Aditya Birla Sunlife Mutual Fund, besides foreign institutional investor Societe Generale.
Whirlpool is among the top four brands in refrigerators and washing machines in India, with revenue of Rs 7,421 crore and net profit of Rs 313 crore in FY25. Whirlpool's presence in the premium end, currently dominated by LG, Samsung and Haier, is negligible.
Havells India had evaluated the Whirlpool stake to expand its presence in refrigerators and washing machines, given its strong presence in air-conditioners through the Lloyd brand. But it was dissuaded by the high valuation as well as the decision to focus on the Lloyd business, which broke even in FY25, said the executives cited.
On Monday, Havells chairman and managing director Anil Rai Gupta told analysts that while the company is open to acquisitions, it is currently focused on building the business organically.
Reliance Industries, too, has backed out, at least for now, due to the same bid-ask gap, said the people cited. Reliance last week announced the acquisition of the Kelvinator brand for the Indian market from Swedish appliance manufacturer Electrolux for Rs 160 crore. The company intends to build Kelvinator into a full-fledged appliance business.