Anirban Sen and Emma-Victoria Farr
(Reuters) – German engineering group Robert Bosch is considering a bid to buy U.S. appliance maker Whirlpool (NYSE:) in a move that would strengthen its position in the appliance market, according to three people familiar with the matter.
Bosch is discussing with potential advisers the possibility of making an offer for Whirlpool, which has a market capitalization of about $4.8 billion, one of the people said.
The sources said they were not confident the offer would be made and asked not to be named because the matter was confidential.
A Bosch spokesman said the company does not comment on “market rumors,” and Whirlpool officials were not available for comment.
The purchase of one of the world’s largest appliance makers will significantly strengthen Bosch’s appliance business at a time when competition with Asian rivals is growing.
Whirlpool has undergone a major restructuring in recent years, which has seen it merge its European business into a new company controlled by Turkish rival Arcelik and sell off its Middle East and Africa business.
The potential takeover comes as Bosch, the world’s largest auto supplier, is considering an acquisition to expand its major appliances division. The deal with Whirlpool, whose brands include Ariston, Hotpoint, Ignis and Privileg, would be one of the largest disclosed deals by a German industrial group. In March, Reuters reported that Bosch was among industrial firms competing to acquire more than $6 billion in heating and ventilation assets from Johnson Controls (NYSE:) International in the US Bosch CEO Stefan Hartung told German business newspaper Handelsblatt in May that the company was eyeing several larger acquisition targets and that it would not rule out entering a new area or striking a global deal. He told reporters earlier in June that the group was open to listing some of its units on the stock market as it explored options for financing deals. He did not specify which divisions. Whirlpool, a globally renowned company known for its large appliances such as washing machines and refrigerators, has been seeking to expand its customer base in recent years by expanding sales of smaller appliances such as espresso machines and other kitchen gadgets as it struggles with growth slowdown. The Michigan-based company recently said it would cut about 1,000 jobs to boost profits. Over the past two years, Whirlpool has lost nearly 50% of its market value. Shares in Swedish rival Electrolux fell 35% over the same period.
Electrolux shares rose after the report and were trading up about 4.5% at 1040 GMT.