Whirlpool to exit Russia with sale of operations to Arcelik

WHIRLPOOL agreed to sell the entirety of its Russian operations to Arcelik for deferred payments of as much as 220 million euros (S$321.2 million) over 10 years.

The sale includes the company's manufacturing site in Lipetsk and the sales organisation in Moscow, as well as sales operations in Kazakhstan and certain other countries, Whirlpool said on Tuesday (Jun 28) in a filing. The appliance maker expects to record a loss of US$300 million to US$400 million in the second quarter in connection with the deal.

In April, Whirlpool cut its full-year sales and earnings forecasts and announced a strategic review of its business in Europe, the Middle East and Africa. The company said in early March that it had limited production in Russia after the invasion of Ukraine to provide only essential goods, without explaining what products fell under the designation.

Whirlpool said in the filing on Tuesday that it "is taking this action given the current operating environment in Russia and has concluded the agreement to be the best course of action for its employees, shareholders and overall business."

Whirlpool employed about 2,500 people in Russia as of April, primarily at the manufacturing facility in Lipetsk. The Russian operations accounted for about 6 per cent of Whirlpool's US$1.1 billion in sales in the EMEA region in the first 3 months of the year, or around US$65 million, according to its quarterly filing.

The sale is expected to be completed in the third quarter. Whirlpool joins other US companies that have opted to leave Russia entirely through a sale of their local business operations, including McDonald's Corp.

Shares of Whirlpool rose 0.7 per cent at 10:04 am in New York. BLOOMBERG