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Friday May 20, 09:19
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Maytag sold to Ripplewood and others for $1.13 Billion
(by Julia Jenson)
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Ripplewood LLC, Goldman Sachs Group Inc.’s GS Capital Partners and J Rothschild Group will purchase Maytag Corp. for about $1.13 billion. The acquisition will take place at the price of $14 a share, at a 21% premium to the company’s closing price on Thursday.
Maytag has ``an incredible brand and products’’ and will ``prosper better as a private company because it can better reinvest in its product line and address its cost structure,’’ Timothy Collins, found of New York-based Ripplewood, said in an interview. ``That’s hard to do when you report quarterly earnings.’’
Maytag, the third-largest U.S. appliance maker, has for six consecutive years suffered a decline in stock price. The decline is explained by the fact that Maytag uses factories located in regions with low cost of labor such as China, Mexico and Eastern Europe to the lesser extent than its competitors Whirlpool Corp. and General Electric Co.
To address the cost problem, Maytag Chief Executive Officer Ralph Hake decided to reduce costs by $150 million this year, lowered the company’s quarterly dividend this month and promised lay-offs. He has already closed the plant in Illinois and now deliberates closing of another two in Ohio.
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