Advent's $1 Billion Takeover Talks with Whirlpool India Put to an End Due to Valuation Disagreements
Valuation disagreements lead to the collapse of Advent International’s $1 billion deal with Whirlpool India for the acquisition of a controlling interest. The PE firm was looking for a 31% stake which, under Indian law, would have allowed them to make a majority open offer.
image for illustrative purpose
Mumbai: Advent International’s negotiations to buy a major stake in Whirlpool India were unsuccessful, and the main reason for the failure was the disagreement that arose over the valuation again, as the sources that were privy to the negotiations told Reuters.
The worldwide private equity company was the leading bidder for the sale of a 31% holding in Whirlpool India by its parent company, Whirlpool Corp. Had the transaction been consummated, it would have necessitated a mandatory open offer for an additional 26% stake, thus giving Advent control of a 57% majority stake—approximately $1 billion total potential deal value.
Whirlpool Corp, whose shares are traded on US exchanges, had earlier this year announced its intention to sell down its 51% stake in Whirlpool India to a little over 20%. The company’s goal was to reduce the global debt to a large extent and to reorganize its assets worldwide. Whirlpool had indicated that the transaction would yield a net cash inflow of $550–600 million.
The deadlock was partly attributed to Advent insisting on a reduced price because of the Indian market's challenges, which they considered to be short-term, such as tighter product regulations and slow movements in the business environment.
Neither Advent nor Whirlpool was willing to comment for Reuters, and the sources who disclosed the information requested that their names be kept confidential because of the sensitive nature of the talks.
