The UK government’s Competition and Markets Authority (CMA) has provisionally cleared the planned deal between appliance companies Arçelik and Whirlpool, after finding it will likely not significantly impact competition within the sector.
The deal, which was first announced in January 2023, would see Arçelik acquiring Whirlpool’s EMEA major domestic appliance (MDA) business, and then setting up a new standalone business called Beko Europe B.V.
However, the CMA raised concerns over the deal in October of last year, on the basis that the merger could massively reduce consumer choice in the MDA market. It then launched an official enquiry into the deal later that month.
According to the CMA, its enquiry panel has considered a wide range of evidence, which included discussions with Arçelik and Whirlpool, as well as both company’s customers and competitors. Based on this evidence, the panel has provisionally concluded that consumers will continue to have a wide range of choices if the deal goes ahead.
The panel believes that despite the strong market positions of both companies, they would still face business competition from brands such as BSH, Haier Group, Samsung, LG and Hisense.
The CMA also believes that Whirlpool’s market position in the MDA sector has significantly declined over the last decade, and it is likely that its European MDA business could be fundamentally different in the future.
It also found that competitor suppliers such as Haier Group and Hisense have gained a wider market share, and it is likely that they will continue to expand.
In an official statement released by the CMA, Martin Coleman, chair of the independent panel investigating the merger, said: “Based on this evidence, we have provisionally found that there will continue to be significant competition in the coming years. We have also provisionally found that Whirlpool’s market position has declined, whilst new entrants to the UK are continuing to grow at a material rate. Our provisional view is therefore that following this deal consumers will continue to benefit from a wide range of options for major domestic appliances.”
A spokesperson for Whirlpool said that the company was pleased with the provisional clearance. They added: “We believe that the transaction will be positive for competition and the combined entity will be well-positioned to deliver value to consumers through attractive brands, sustainable manufacturing, product innovation, and consumer services.
“With earlier clearances from the European Commission as well as Austria, Germany, South Africa and China, we have now passed all regulatory milestones and continue to expect to close the transaction by April.”
A spokesperson from Arçelik also welcomed the news. They said: “The CMA’s provisional findings recognise the highly competitive nature of the UK home appliance market, with competition only expected to intensify as international producers expand their presence.
“The new company will be good for UK consumers as it will offer a wider range of products and better access to high quality, innovative, energy-efficient, and trusted lifestyle products and solutions.”
Despite the favourable outcome, the CMA’s recent decision is still provisional, and the authority will now consult on the findings before reaching a final decision.
The CMA is due to issue its final report on the matter by March 26. Interested parties are welcome to supply responses to these provisional findings up to February 29, which will be considered as part of the final official decision.