The acquisition of Whirlpool’s EMEA Major Domestic Appliances Business by Beko owner Arçelik could harm competition, reports The Competition and Markets Authority (CMA)

It centres on the fact both companies supply washing machines, tumble dryers, dishwashers, refrigerators, freezers and cooking appliances, serving the same price sector, with few competitors.

The CMA is concerned that lessening of competition may result in higher prices or a reduction in choice or quality for customers.

Sponsored Video

Quarter sawn Tulipwood

Turkish appliance company Arçelik and US company Whirlpool entered into a Contribution Agreement, in January 2023, where Arçelik will set up a new standalone business, Beko Europe.

Arçelik will hold around 75% of the shares in Beko Europe, while Whirlpool will have a minority shareholding of 25%.

Arçelik supplies major domestic appliances under Beko, Blomberg and Grundig brands in the UK, while Whirlpool owns Whirlpool, Indesit and Hotpoint brands.

The CMA believes Arçelik and Whirlpool’s Europe, Middle East and Africa (EMEA) major domestic appliances business will cease to be distinct as a result of the acquisition.

The CMA said the merged company raised “significant” competition concerns because it would be the largest individual supplier of washing machines, tumble dryers, dishwashers and cooking appliances – a market worth over £3.8 billion in the UK.

However, its concerns don’t cover refrigerators and freezers, as the CMA reported: “Although the Parties do appear to compete closely in these product categories, they have comparatively lower market shares and face considerable competitive constraints.”

Sorcha O’Carroll, CMA senior director of mergers said: “The proposed deal will combine 2 major providers of home appliances in the UK, meaning that well-known brands such as Hotpoint, Indesit and Beko will sit under one owner.

“We’re worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers.

“As competition from other suppliers in the low-mid price range appears to be limited, we are concerned that this tie-up could leave people paying more or receiving lower quality products.

“Unless Arçelik offers a solution to address our concerns, we’ll move to an in-depth investigation.”

A spokesperson from Whirlpool said: “We look forward to continuing our constructive dialogue with the CMA for our proposed transaction with Arçelik.

“The combination of our two businesses will bring significant benefits for customers and consumers through attractive brands, sustainable manufacturing, product innovation, and consumer services.

“We believe the CMA should reach the same conclusion following its review.”

An Arçelik spokesperson commented: “Arçelik remains in close and constructive collaboration with the CMA in the context of the proposed transaction with Whirlpool Europe.

“We will work with the CMA to address the concerns that they have raised and ensure that the new entity will combine both companies’ joint European manufacturing expertise, strong supply chains, effective distribution and sales networks and innovative product pipelines to create additional value for European consumers.”

The companies have until October 5 to respond to the CMA about its concerns, otherwise it will move to more in-depth investigation.