The strategic divestiture is aimed at increasing its focus on its consumer business.
On Tuesday, Whirlpool Corp, a U.S. home appliance maker, disclosed it has agreed to divest its Embraco compressor business to Japan’s Nidec Corp for $1.08 billion. The strategic move is aimed at increasing its focus on its consumer-facing business.
As per the company’s statement, the deal does not include Embraco’s Italy facility, which is set to be shutdown. Whirlpool does not see the deal having any material impact on its 2018 financial results.
Significantly, it said it expects to buyback, up to $1 billion, of it shares, beginning from April 26, through a tender offer at an anticipated price of $150 to $170 per share.
Following the tender offer, Whirlpool intends to execute open market share repurchases throughout 2018.
Brazil-headquartered Embraco has been a Whirlpool majority-owned business unit since 1997 and employs nearly 11,000 people across 8 plants in Mexico, Slovakia, Brazil, China and Italy.
While Citigroup Global Markets Inc acted as its financial adviser, Gottlieb, Linklaters LLP and Cleary, Steen and Hamilton LLP were its legal advisers.