Britain’s competition regulator is considering a probe into the proposed merger between Whirlpool and a company owned by Turkey’s largest industrial conglomerate.

The Competition and Markets Authority (CMA) said Arcelik’s planned acquisition of Whirlpool’s European home appliances business might lead to higher prices and lower-quality products for consumers.

Unless Arcelik sufficiently addresses its concerns, the watchdog warned, it would open a comprehensive investigation into the deal.

Concern: The CMA said Arcelik's planned acquisition of Whirlpool's European home appliances business might lead to higher prices and lower-quality products for consumers

Concern: The CMA said Arcelik's planned acquisition of Whirlpool's European home appliances business might lead to higher prices and lower-quality products for consumers

Concern: The CMA said Arcelik’s planned acquisition of Whirlpool’s European home appliances business might lead to higher prices and lower-quality products for consumers

Istanbul-based Arcelik, owned by Koç Holding, is one of Europe’s largest household appliance sellers, and its Beko brand is particularly popular among UK customers.

In January, the group’s Ardutch subsidiary agreed with Whirlpool to combine their European operations into a new standalone business.

Arcelik will hold a 75 per cent stake in the new joint venture, while Whirlpool, whose brands include Hotpoint and Indesit, will control the remaining 25 per cent. 

Should the tie-up go ahead, which is expected sometime later this year, the firms anticipate generating more than €200million of cost synergies.

The newly-enlarged company would also likely have over 20,000 employees across Europe, a combined annual turnover of close to €6billion, and a yearly production capacity of approximately 24 million white goods.

On top of that, it would be the UK’s biggest individual supplier of tumble dryers, dishwashers, washing machines and cooking instruments – a market valued at over £3.8billion.

However, the CMA said the two firms’ collective dominance of the low to mid-range price categories of these specific appliances would mean a ‘small number’ of competitors.

‘We’re worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers,’ added Sorcha O’Carroll, the CMA’s senior director of mergers.

‘As competition from other suppliers in the low-mid price range appears to be limited, we are concerned that this tie-up could leave people paying more or receiving lower quality products.

‘Unless Arçelik offers a solution to address our concerns, we’ll move to an in-depth investigation.’

The business has until 5 October to respond to the competition body. European antitrust regulators are also analysing the tie-up and are due to make a decision by 23 October.

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This post first appeared on Dailymail.co.uk

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