After acquiring Kelvinator, Mukesh Ambani's Reliance planned to buy stake in THIS US firm but backed out due to...

Mukesh Ambani’s Reliance Industries has been investing in new energy, digital services, and retail. In a bid to diversify its portfolio, the retail giant recently acquired home appliances brand Kelvinator, in a major move to strengthen its foothold in India’s fast-growing consumer durables market. The company had set its eye on acquiring a 31 per cent controlling stake in Whirlpool India, however, it has withdrawn from this particular acquisition as per latest reports.

Why Reliance Retail backed out from Whirlpool stake sale?

According to an Economic Times report, Reliance Retail and other prominent contenders like Havells, TPG, and KKR have reportedly withdrawn, owing to valuation disagreements and concerns about future royalty payments. Whirlpool Corporation, the US-based parent company, has announced plans to reduce its stake in its Indian arm to approximately 20% by mid to late 2025. Initially, the stake sale garnered interest from several players, including Reliance Retail, Havells India, and private equity firms like EQT and Bain Capital. However, private equity firms EQT and Bain Capital have remained as the final contenders in the race to buy the 31% stake. They are conducting due diligence, and binding offers are anticipated by August 2025.

Whirlpool stake sale

The market capitalisation of Whirlpool, India's major player in the company's Asia operations, stood at Rs 18,116 crore as of Tuesday. This stake sale is expected to trigger an open offer for an additional 26% stake, which might take the incoming investor's total holding to 57%, depending on subscription levels. Currently, the public shareholders own 49% of the company. If someone buys the full 57% stake, it'll cost around Rs 10,354.6 crore at current market prices, which is a bit more than initially expected.

Meanwhile, Whirlpool's stake sale is part of its broader strategy to raise funds after the company reported a $1.5 billion loss in the fourth quarter of 2022. Known for brands like Whirlpool, KitchenAid, and Maytag, the company aims to raise $550–600 million. The company's Indian equity is held through Whirlpool Mauritius. Goldman Sachs is handling the formal stake sale process launched in April.