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Dejong: Whirlpool Seeks Edge In Sales Competition

Whirlpool officials began taking a closer look at Maytag books on Wednesday as the two appliance companies took the initial steps toward a deal that would combine their businesses. Whirlpool Corp. boosted its offer for the Iowa appliance maker on Friday by $1 to $18 a share, or about $1.43 billion. Industry watchers say buying Maytag may help Whirlpool solidify its place in a highly competitive market. University of Iowa accounting professor DOUG DEJONG said 65 percent of all major appliances, including washers, dryers and refrigerators, are sold through retailers such as Sears, Best Buy, Home Depot and Lowes. That narrow channel of distribution creates intense competition for display space. Maytag has seen market share in some appliances slip in recent years, and it was dropped last year as a major appliance supplier to Best Buy, which gave space instead to Korean manufacturer LG Electronics. "Whirlpool is scared that they might be one of the next recipients of increased competition," Dejong said. "For them, trying to purchase Maytag makes a lot of sense. The brands are there, the distribution is there, they have great production facilities and they can offer more volume and more products to the 65 percent of the slice."

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