Maytag approves sale to Whirlpool

first_imgNEWTON, Iowa – Maytag Corp. shareholders on Thursday approved the company’s sale to rival appliance-maker Whirlpool Corp., marking the end of independence for the iconic home appliance maker that failed to overcome cheaper competitors and a waning of its trademark image for dependability. If authorized by the government, Whirlpool will buy Maytag, founded in 1893 by farm tool maker Fred Maytag, for about $1.79 billion in cash and stock. The Maytag brand was a television fixture for decades in commercials featuring “Ol’ Lonely,” the repairman with nothing to do because the company’s appliances were so dependable. Preliminary totals show that of 80.3 million outstanding shares, 54.98 million shares, or 68.5 percent, approved the merger. The company said 97.8 percent of voted shares approved the deal. AD Quality Auto 360p 720p 1080p Top articles1/5READ MORERose Parade grand marshal Rita Moreno talks New Year’s Day outfit and ‘West Side Story’ remake Maytag shareholders will receive $21 a share, payable half in cash and half in a fraction of Whirlpool stock, depending on the value of Whirlpool shares when the deal closes. Fred Maytag’s wooden-tub washing machine was introduced in 1907. His innovative designs swept the nation and the company has remained a home-appliance leader for a century. The vote was a grim result for longtime Maytag workers and retirees. “I feel like I attended a funeral today,” said Judy Mulbrook, of Milford, Iowa, who retired from Maytag in 2003 after 32 years. “I feel like the death happened in the past year and this is putting everything to rest.” Ed Trost, 79, of Newton, said the merger is the only future for the company. He said Maytag was slow to react to the softening appliance market and increased foreign competition. “It’s heartbreaking,” said Trost, who worked for Maytag for 35 years before retiring in 1988. “You go through life thinking it’s going to be here forever, but that’s not materializing now.” In recent years, however, Maytag’s profitability has languished as competitors outsourced parts and moved production to low-cost factories. Maytag was slow to adopt cost-saving measures and fell behind as competitors wooed consumers away with new appliance designs and features. Some shareholders were bitter about Maytag’s declining performance. Lonnie White, who retired from Maytag and as a UAW union representative, said managers focused on cutting costs and jobs instead of the quality and dependability traits that were the company’s trademark. “If they had concentrated on that … we wouldn’t be here today,” White said. Maytag, the nation’s third-largest appliance manufacturer, became the target of a bidding battle when a New York-based investment group offered to buy the company for $1.13 billion in May. In June, Chinese appliance-maker Haier America stepped in with a $1.28 billion offer, but it was withdrawn when Whirlpool offered $1.37 billion. Whirlpool increased its offer three times until Maytag agreed to consider the deal. Whirlpool, based in Benton Harbor, Mich., also will assume Maytag’s debt of $977 million. Maytag CEO Ralph Hake credited employees and loyal customers for more than a century of success for the company. He said if regulators approve the merger, Maytag as a company will cease to exist. “We have to have an ending to have a new beginning,” he said. Whirlpool CEO Jeff M. Fettig said merging the two companies will benefit consumers, trade customers and shareholders. “We believe this transaction will result in better products, quality and service, as well as efficiencies, which will enhance our ability to succeed in the increasingly competitive global home-appliance industry,” he said. A representative of the International Association of Machinists from Chicago attended the meeting. Christina Nedrow said it’s wrong that Hake will leave Maytag with more than $10 million in bonuses and benefits after poorly managing the company. “The community lost, the shareholders lost,” she said. “Every stakeholder lost – except for Ralph Hake and other top management.” The machinists’ union represents line workers in Maytag factories in Iowa and Illinois. Shares of Whirlpool rose 29 cents to close at $84.17 on the New York Stock Exchange, where Maytag shares gained 33 cents, or 1.8 percent, to $19.10.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more