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U.S. lawyers oppose Whirlpool-Maytag deal
Justice Dept. attorneys "made it clear" to antitrust chief that they believe the $1.7 billion deal would hurt competition: source.
March 17, 2006: 6:38 PM EST
WASHINGTON/ATLANTA (Reuters) - U.S. Justice Department antitrust staff lawyers are opposed to Whirlpool Corp.'s proposed acquisition of rival Maytag Corp. as the deadline for a decision nears, a source close to the matter said Friday. Maytag (Research) shares fell nearly 1 percent in after-hours trading on the Inet electronic network.
Lawyers in the department's antitrust division "have made it clear" to the antitrust chief, Thomas Barnett, that they believe the $1.7 billion deal would hurt competition, said the source, speaking on the condition of anonymity.
Barnett has not yet made his decision on whether to challenge the acquisition, the source said. And it was not clear whether the staff lawyers had given him a formal recommendation.
The proposed deal would form the world's largest appliance maker and give the combined company a large share of the U.S. market for washing machines and dryers.
Justice Department lawyers have been seeking sworn statements from competitors and retailers about how the combination of the companies would affect competition.
The department is expected to hold a meeting with lawyers from Whirlpool and Maytag as soon as next week, several sources familiar with the deal said.
Justice Department spokeswoman Gina Talamona said the investigation into the deal was ongoing and declined further comment. A Maytag spokesman declined to comment and Whirlpool (Research) officials were not immediately available for comment.
Last month Whirlpool and Maytag extended to March 30 a deadline for the department to complete its antitrust investigation.
Should the Justice Department file suit to halt the deal, Whirlpool could fight it in court, or walk away and pay Maytag a $120 million reverse breakup fee.
Of three companies that expressed interest in Maytag last year, Whirlpool made the highest bid at $21 a share. Ripplewood Holdings, a private equity firm, offered $14 a share. A group led by Chinese appliance maker Haier mulled a $16-a-share bid for Maytag but pulled out after Whirlpool entered the fray.
Friday, Maytag shares closed down almost 6.9 percent to $16.71 on the New York Stock Exchange while Whirlpool shares dropped almost 1.5 percent to $86.25.
For the past two years, Maytag has posted net losses as it grappled with a slump at Hoover, restructuring costs and competition from rivals such as LG Electronics of South Korea.
Justice Dept. attorneys "made it clear" to antitrust chief that they believe the $1.7 billion deal would hurt competition: source.
March 17, 2006: 6:38 PM EST
WASHINGTON/ATLANTA (Reuters) - U.S. Justice Department antitrust staff lawyers are opposed to Whirlpool Corp.'s proposed acquisition of rival Maytag Corp. as the deadline for a decision nears, a source close to the matter said Friday. Maytag (Research) shares fell nearly 1 percent in after-hours trading on the Inet electronic network.
Lawyers in the department's antitrust division "have made it clear" to the antitrust chief, Thomas Barnett, that they believe the $1.7 billion deal would hurt competition, said the source, speaking on the condition of anonymity.
Barnett has not yet made his decision on whether to challenge the acquisition, the source said. And it was not clear whether the staff lawyers had given him a formal recommendation.
The proposed deal would form the world's largest appliance maker and give the combined company a large share of the U.S. market for washing machines and dryers.
Justice Department lawyers have been seeking sworn statements from competitors and retailers about how the combination of the companies would affect competition.
The department is expected to hold a meeting with lawyers from Whirlpool and Maytag as soon as next week, several sources familiar with the deal said.
Justice Department spokeswoman Gina Talamona said the investigation into the deal was ongoing and declined further comment. A Maytag spokesman declined to comment and Whirlpool (Research) officials were not immediately available for comment.
Last month Whirlpool and Maytag extended to March 30 a deadline for the department to complete its antitrust investigation.
Should the Justice Department file suit to halt the deal, Whirlpool could fight it in court, or walk away and pay Maytag a $120 million reverse breakup fee.
Of three companies that expressed interest in Maytag last year, Whirlpool made the highest bid at $21 a share. Ripplewood Holdings, a private equity firm, offered $14 a share. A group led by Chinese appliance maker Haier mulled a $16-a-share bid for Maytag but pulled out after Whirlpool entered the fray.
Friday, Maytag shares closed down almost 6.9 percent to $16.71 on the New York Stock Exchange while Whirlpool shares dropped almost 1.5 percent to $86.25.
For the past two years, Maytag has posted net losses as it grappled with a slump at Hoover, restructuring costs and competition from rivals such as LG Electronics of South Korea.
