NEWTON, Iowa – Shareholders of Maytag Corp. (MYG) on Thursday approved the sale of the company to rival appliance-maker Whirlpool Corp. (WHR) for about $1.79 billion in cash and stock.
If the transaction is cleared by the U.S. Department of Justice early next year, it will mark the end of the iconic Iowa-based company as an independent appliance manufacturer.
If approved the government, Maytag shareholders will receive $21 a share, payable half in cash and half in a fraction of Whirlpool stock. The exact amount Maytag shareholders will get in stock depends on the value of Whirlpool shares when the deal closes. Maytag will become a wholly owned subsidiary of Whirlpool.
Newton-based Maytag was founded in 1893 by Fred Maytag, a maker of farm tools, who introduced a wooden-tub washing machine 14 years later. His innovative designs swept the nation and the company has remained a home-appliance leader for a century.
In recent years, however, Maytag's profitability has languished as competitors improved efficiency by outsourcing parts and moving 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.
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In June, Chinese appliance-maker Haier America stepped in with a $1.28 billion offer, but it was withdrawn when Whirlpool offered $1.37 billion.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.
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