Whirlpool Corp. (WHR) said it will sell its Embraco compressor business to Nidec Corp. in a $1.08 billion cash deal so it can focus on its core – consumer products. The deal is slated to close by early next year.
Whirlpool to Focus on Consumer Business
“Since Embraco operates in the business-to-business space, this transaction enhances our strategic focus on investing in and growing our consumer-facing business,” Marc Bitzer, chief executive officer of Whirlpool, said in a statement.
Based in Brazil, Embraco has been majority-owned by Whirlpool since 1997. It employs about 11,000 workers there and in manufacturing plants in Italy, China, Slovakia, and Mexico as well as in offices in the U.S. and Russia.
Whirlpool also said it plans to buy back about $1 billion worth of shares in a Dutch Auction tender offer that will start April 26. Shares will be priced from $150 to $170 per share. (See also: Top 5 Companies Owned by Whirlpool.)
Nidec said it expects the Embraco acquisition to provide “attractive growth opportunities” with its refrigerator compressor sector, which churns out about 170 million units per year.
Late Monday Whirlpool reported first-quarter earnings and revenue that fell below estimates. It earned $1.30 per share, down from $2.01 per share a year prior and down from the Street estimate of $2.51 per share.
Revenue was $4.91 billion, up from $4.78 billion a year prior but below the $4.95 billion analyst estimates. For the full year, Whirlpool expects GAAP profit of $12.30 to $13.30 per share, which was also below the Street estimate of $13.68.