Whirlpool India's holding company, Whirlpool Corporation, has announced its intention to sell down its stake in the Indian unit to about 20% by mid to late 2025, through one or more market sales, from the current 51% ownership, an exchange said on January 30.
Shares of Whirlpool India are down by 20% on this announcement.
This information was part of Whirlpool Corporation's earnings release filed with the United States Securities and Exchange Commission. This development comes nearly a year after it sold nearly 24% stake in the Indian unit early last year for about $468 million in an effort to reduce debt.
At that time, Whirlpool Corp CEO Marc Bitzer had told CNBC that they decided to sell the stake as Whirlpool India valuations were at an earnings multiple of 50 times. “We are not leaving India,” he had said. “We believe in India for the long term… but if we have a business trading at 50 times multiple, and your own company trades a lot lower, it’s basically an asset arbitrage,” Bitzer said.
The US parent currently holds 51% stake in the Indian unit, and after the intended sell down, it will still remain the largest shareholder, said the statement.
The company will remain a 'relevant part' of the parent's portfolio, said the company statement.
"Whirlpool India will remain a relevant part of Whirlpool Corporation's portfolio, and we continue to believe Whirlpool India has a strong long-term trajectory for growth. We intend the anticipated sell-down to result in autonomy for Whirlpool India to adjust to the ever-evolving industry conditions, enabling Whirlpool India to focus on accelerated growth and utilise its well-funded business to invest further in the business," Whirlpool Corp said.
Whirlpool Corp expects net cash proceeds of $550-600 million from the transaction. Reports indicate the sell down will help Whirlpool Corporation optimize its capital allocation, and focus on core operations while maintaining a significant interest in the Indian market.
This decision is part of the parent's strategy to strengthen its balance sheet and maximize shareholder return.
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