CMA warns of potential competition concerns in Hotpoint-Beko merger

The proposed merger between leading domestic appliances companies behind the brands Hotpoint and Beko has raised concerns with Britain’s Competition and Markets Authority (CMA) over potential negative impacts on consumer choice and pricing in the U.K. The CMA issued a warning, stating that unless Turkish company Arcelik, which is set to take over Whirlpool’s European domestic appliances business, addresses these concerns, it will initiate an in-depth investigation into the deal.

The merger would result in the creation of the largest supplier of washing machines, tumble dryers, dishwashers, and cooking appliances in the U.K. market, worth over £3.8 billion (£1 = $1.21). The CMA highlighted that Arcelik and Whirlpool (NYSE:WHR) hold a particularly strong position in the low to mid-range price categories of these domestic appliances, facing competition from only a limited number of competitors.

Sorcha O’Carroll, CMA senior director of mergers, expressed concerns about the implications of the merger on consumer choice and pricing. “The proposed deal will combine two major providers of home appliances in the U.K., meaning that well-known brands such as Hotpoint, Indesit and Beko will sit under one owner,” O’Carroll said. “We’re worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers.”

The deal was announced earlier this year in January, with plans for a new company comprising Arcelik’s and Whirlpool’s European domestic appliances businesses. Under the terms of the agreement, Arcelik would own 75% of the combined company while Whirlpool would hold the remaining 25%. The companies have until October 5 to respond to the CMA’s concerns with sufficient solutions.

In addition to the scrutiny from the CMA, the European Union’s competition watchdog is also reviewing the deal and is expected to reach a decision by October 23.