Latest News by Industry
• Company agrees to deferred payments of up to 220 million euros
• Deal will result in loss of $300 million to $400 million in current quarter
Whirlpool Corp (NYSE: WHR) said it has struck a deal to sell its Russian business operation to Turkish appliances maker Arçelik AS, joining a raft of Western firms exiting the sanctions-hit country.
The US appliance maker entered into a deal to sell the company’s Russian manufacturing site in Lipetsk, the sales organization in Moscow and also sales operations in Kazakhstan and other select countries in the Commonwealth of Independent States (CIS).
The deal will result in a loss of $300 million to $400 million in the current quarter, Whirlpool said in a regulatory filing.
The appliance maker said, “as a US company, [it] is taking this action given the current operating environment in Russia.”
The transaction consideration is expected to be made in the form of deferred payments over 10 years and is capped based on the net asset value of the business, which is currently estimated at around 220 million euros ($233 million).
The company said after the deal closes, its Russian manufacturing site will continue to manufacture appliances under the Indesit, Hotpoint and Stinol brands.
Whirlpool joined other companies like the telecoms equipment manufacturing giant Cisco Systems Inc (NASDAQ: CSCO) and sportswear maker Nike Inc (NYSE: NKE), winding down their businesses in Russia.
Last month, the US burger chain McDonald’s Corp (NYSE: MCD) sold its Russian operation to Alexander Govor, a local licensee, making it the biggest exit by a global brand after operating for more than three decades.
Western companies are seeking to exit Russia with the prospect of new laws being passed in the coming weeks allowing Moscow to seize assets of foreign firms and impose criminal penalties, encouraging some businesses to accelerate their departure plans.
Picture Credit: WSJ
ALSO READ: