Talks between global private equity firm Advent International and U.S.-based appliance major Whirlpool Corp. regarding the sale of a significant stake in Whirlpool of India have collapsed, according to people familiar with the matter.
The proposed transaction, valued at up to $1 billion, failed primarily due to differences over valuation, underscoring the challenges facing dealmaking in India’s highly competitive consumer durables market.
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Deal Structure and Strategic Context
Advent International had emerged as the leading contender to acquire a 31% stake in Whirlpool of India from its Michigan-headquartered parent, Whirlpool Corp. Such an acquisition would have triggered a mandatory open offer under Indian regulations, enabling Advent to purchase an additional 26% stake and assume majority control with a 57% holding. Taken together, the transaction would have implied an overall deal value of approximately $1 billion.
In January, Whirlpool Corp. disclosed plans to reduce its stake in the Indian subsidiary from 51% to around 20% as part of a broader effort to streamline its global portfolio and reduce debt. At the time, the company estimated net cash proceeds of $550 million to $600 million from the stake sale.
Valuation Differences Derail Talks
People close to the negotiations said the discussions broke down after the two sides failed to agree on pricing. Advent reportedly sought a lower valuation, citing near-term headwinds for Whirlpool in India, including tighter regulatory requirements around product standards and energy efficiency.
By contrast, Whirlpool’s primary objective was to maximise cash proceeds from the transaction to strengthen its balance sheet, one source said. The company was therefore unwilling to accept a lower valuation. Reuters could not independently verify the valuation sought by Whirlpool or Advent’s counteroffer.
Advent declined to comment on the matter, while Whirlpool did not respond to requests for comment. All sources spoke on condition of anonymity due to the confidential nature of the talks.
Competitive Pressures in the Indian Market
While Whirlpool has been a well-known household brand in India for decades, competition in the country’s consumer durables sector has intensified. Rivals such as LG Electronics India and Samsung Electronics have gained ground, putting pressure on sales growth.
Whirlpool of India reported a 16% increase in revenue from operations to $880.53 million in the financial year ended March. However, market pressures have weighed on investor sentiment, with the company’s shares declining 47% so far this year.
Strategic Implications
Advent’s interest in Whirlpool of India had signalled a deeper push into the Indian consumer market, complementing its existing investments in the sector, including Eureka Forbes.
The collapse of the talks highlights the growing valuation gap between global sellers seeking to unlock capital and investors wary of short-term risks in India’s evolving regulatory and competitive landscape.
Frequently Asked Questions
What was the proposed deal between Advent International and Whirlpool?
Advent International was in talks to acquire a 31% stake in Whirlpool of India from its parent company, Whirlpool Corp. The transaction would have triggered a mandatory open offer under Indian regulations, potentially allowing Advent to gain majority control of the company.
What was the estimated value of the deal?
The overall deal was valued at approximately $1 billion, assuming Advent acquired both the initial 31% stake and an additional 26% through an open offer.
Why did the deal talks collapse?
The negotiations collapsed due to disagreements over valuation. Advent reportedly sought a lower price, citing competitive pressures and short-term challenges in the Indian market, while Whirlpool aimed to maximise proceeds to reduce its global debt.
What stake does Whirlpool Corp currently hold in its Indian unit?
As of January, Whirlpool Corp held a 51% stake in Whirlpool of India and had announced plans to reduce its holding to about 20% as part of a global restructuring strategy.
Why was Whirlpool looking to sell its stake in India?
Whirlpool Corp intended to use the proceeds from the sale to pay down a significant portion of its debt and streamline its global asset portfolio.
What challenges is Whirlpool facing in the Indian market?
Whirlpool is facing increased competition from rivals such as LG Electronics India and Samsung Electronics, along with stricter regulations on product standards and energy efficiency norms.
Conclusion
The collapse of talks between Advent International and Whirlpool Corp. highlights the growing gap between seller expectations and investor caution in India’s consumer durables sector. While Whirlpool remains keen to unlock value from its Indian operations to reduce global debt, potential buyers are increasingly sensitive to regulatory challenges, intensifying competition, and short-term market pressures.
