Arçelik and Whirlpool merger gets EU approval

Latest Kbb News - Yesterday, the European Commission gave its approval for the proposed merger between household appliance giants, Arçelik and Whirlpool Corporation.

Although the European Commission has given the green light to the Arçelik and Whirlpool merger, much to the delight of both Arçelik and Whirlpool, in the UK the Competition and Markets Authority (CMA) also has sway over the final outcome and has previously voiced concerns about the reduction in UK consumer choice should the merger proceed unchallenged.

Arçelik and Whirlpool Ignore CMA

The Competition and Markets Authority (CMA) voiced its concerns for the UK consumer in September in regards to the Arçelik and Whirlpool merger and invited both Arçelik and Whirlpool to submit respond. That offer was rejected.

The CMA concerns are understood to relate specifically to the possible outcomes of reduced competition in the sale of household appliances such as washing machines, tumble-dryers, dishwashers, and cooking appliances.

It us understood that in late September the CMA disclosed its concerns to both Arçelik and Whirlpool and in doing so extended an invitation for both Arçelik and Whirlpool to “offer acceptable undertakings to address these competition concerns”.

However, on the October 5th deadline both Arçelik and Whirlpool stated that they had declined to offer any such "undertakings" to the CMA.

Competition and Markets Authority Phase 2 Investigation

As a result of the snub the Competition and Markets Authority has officially launched a phase-two investigation and has appointed an inquiry team whom now have until March 26, 2024 to complete their investigations.

News of the snub to the Competition and Markets Authority, especially by Whirlpool may come as no shock to many in the UK, whom have seen numerous Kbb news reports on Whirlpool and its 'shocking conduct' (in this publication) in its handling of the Whirlpool-Hotpoint-Creda-Indesit-Fire-Saga.

Even the UK House of Parliament took Whirlpool to task over its 'poor handling' of the crisis.

Bosses at Whirlpool whose brands include Hotpoint, Indesit, Creda, Swan and Proline were accused of putting public relations ahead of customer safety when dealing with blazes in faulty machines in news that whilst shocking was not really surprising given the continued conduct of Whirlpool in trying to minimise the impact of the vast scale of the fire risk appliances.

CMA Right to Have Concerns?

Given the recent history of Whirlpool in respect of safety issues and its household appliances a logical person would be forgiven for thinking that the merger could only make matters worse if a similar crisis were to occur, given the power of the new [merged] company and the increased reach of the appliances it would then sell, thus exposing a much wider number of consumers to any future failings.

As Arçelik's Beko brand is Europe's second largest white goods and largest freestanding white goods brand reaching 440 million people in over 130 countries, the increased reach following any Arçelik and Whirlpool merger is certainly not under any doubt.

A 'lack of competition' and reduced consumer choice isnt just about prices however!

Of the investigation a spokesperson for Arçelik commented that it “remains in close and constructive collaboration with the CMA in the context of the proposed transaction with Whirlpool Europe.”

Similarly, a spokesperson for Whirlpool commented that it “looks' forward to continuing our constructive dialogue with the CMA in a Phase 2 process for our proposed transaction with Arçelik”.