Whirlpool India Stake Sale Race Heats Up as Reliance, Havells Join the Fray

Billionaire Mukesh Ambani-led Reliance Retail and consumer appliances giant Havells India have joined the race to acquire a stake in Whirlpool India. These companies have now joined financial sponsors like EQT and Bain Capital, who have already been shortlisted after the initial round of screening, the Economic Times reported, citing sources. 

This comes as Whirlpool India’s parent, Whirlpool Corp., is eyeing to sell 31% equity stake while retaining 20% in the company. Whirlpool India contributes 85% of Whirlpool Corp’s total Asia revenue. The company reportedly said that it is keen to raise net cash proceeds of $550-600 million from the stake sale deal, a formal process for which was launched in April this year by consumer appliances giant’s advisor Goldman Sachs. 

This comes months after the US parent of the company sold a 24.7% stake in its Indian arm via block deals worth Rs 4,039 crore.

The American parent had said that the reduction of its shareholding will offer more autonomy to Whirlpool India and consequently help in increased focus on growth and utilise its well-funded business to invest further. 

The development also comes around a time when Whirlpool India, which is one of the few multinational companies to have entered India in the late 1980s, has failed to scale to a level its competitors like LG, Samsung and Haier have. 

Last month, Whirlpool Corp., chief financial and administrative officer, James W Peters, told analysts that the stake sale deal in India has “generated significant interest from large third-party investors”. 

But Whirlpool India isn’t the only major consumer giant on Reliance Retail’s stake purchase spree. Earlier, the Mukesh Ambani-led conglomerate’s retail arm was in race with TPG and Bain to purchase India Business of Haier as its Chinese parent was eyeing to significantly narrow down ownership due to strained diplomatic ties between India and China. But the companies pulled back due to valuations related differences.