Filed by: Whirlpool Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Maytag Corporation
Commission File No: 1-655
Whirlpool
Corporation
August 30, 2005
Dear Trade Customer:
I am pleased to report that Whirlpool and Maytag signed a definitive
merger agreement on August 22, 2005. The joint announcement that Whirlpool and
Maytag issued is attached.
We firmly believe the combination of Whirlpool and Maytag will create
substantial benefits for you and for consumers. This combined business will
enable us to achieve significant efficiencies and better asset utilization. It
will allow us to share our innovation across a wide range of branded products
with a much broader consumer base. We also expect that cost savings from the
combined business will be invested into even better products, quality and
service to help us continuously earn your business in this highly competitive
global industry.
With our proven record for productivity, and our innovation and brand
competencies, we are confident that Whirlpool Corporation will remain your best
choice for appliances, and in the future, those choices will include a strong
offering across both Whirlpool's and Maytag's brands.
I hope you share our excitement about this historic transaction, which
we expect could close as early as the first quarter of 2006.
In the mean time, we are working to ensure that Whirlpool Corporation
continues to offer you competitive products and service to help you compete and
win in the marketplace - both now and in the future.
/s/ Sam Abdelnour
Sam Abdelnour
Vice President, US Sales
Whirlpool Corporation
Please see attached Press Release for disclosures required under
federal securities laws.
PRESS RELEASE
WHIRLPOOL CORPORATION AND MAYTAG CORPORATION
--------------------------------------------
SIGN DEFINITIVE MERGER AGREEMENT
--------------------------------
BENTON HARBOR, Mich. and NEWTON, Iowa - August 22, 2005 - Whirlpool Corporation
(NYSE: WHR) and Maytag Corporation (NYSE:MYG) today signed a definitive merger
agreement in which Whirlpool will acquire all outstanding shares of Maytag in a
cash and stock merger valued at $21 per share. One half of the per share
consideration will be paid in cash and the balance in a fraction of a share of
Whirlpool common stock as described below.
The Board of Directors of Maytag has approved the merger agreement with
Whirlpool and intends to recommend to Maytag's shareholders that they adopt the
agreement.
Prior to signing the Whirlpool merger agreement, Maytag paid a $40 million
termination fee to Triton Acquisition Holding and, thereafter, terminated the
agreement with Triton. In accordance with Whirlpool's August 10, 2005, offer, as
extended on August 12, 2005, Whirlpool has reimbursed the $40 million to Maytag
today. In addition, Maytag said that the special meeting of stockholders
scheduled for Friday, September 9, 2005, has been cancelled as a result of the
termination of the Triton merger agreement.
The aggregate transaction value, including assumption of approximately $977
million of debt, is approximately $2.7 billion. The transaction is subject to
customary conditions, including, among other things, regulatory approvals and
Maytag shareholder approval. The transaction will be taxable to Maytag
shareholders.
Maytag shareholders will receive, for each share held, $10.50 in cash and
between 0.1144 and 0.1398 of a share of Whirlpool stock. The amount of Whirlpool
stock to be issued in exchange for each Maytag share will depend upon the
volume- weighted average trading price of Whirlpool's stock during a 20
trading-day period ending shortly before the merger. Maytag shareholders will
receive 0.1144 of a share of Whirlpool stock if the average Whirlpool stock
price is $91.79 or greater and 0.1398 if it is $75.10 or less; between the two
prices, the exchange ratio will vary proportionately.
Howard Clark, Maytag board member since 1986 and lead director, said, "After
careful consideration in conjunction with our financial and legal advisors and
an independent committee of Maytag's board consisting of all non-management
directors, we re-evaluated the transaction with Triton and concluded that the
Whirlpool agreement is superior and is in the best interest of our
shareholders."
Jeff Fettig, Whirlpool chairman, president and CEO, said, "The combination of
Whirlpool and Maytag will create very substantial benefits for consumers, trade
customers and our shareholders. This transaction will enable us to achieve
significant efficiencies and better asset utilization. It will also allow us to
offer a wider range of products to a much broader consumer base."
"Overall, this transaction will translate into better products, quality and
service, as well as efficiencies, which will enhance our ability to succeed in
the increasingly competitive global home-appliance industry," added Fettig. "We
remain highly confident that we will receive regulatory clearance for this
transaction in a timely manner."
Ralph Hake, Maytag chairman and CEO, said, "This combination brings together two
leading organizations with strong traditions in quality and customer
satisfaction. Together, Whirlpool and Maytag will bring substantial benefits to
consumers around the world, as well as to shareholders and customers."
Whirlpool has sufficient resources to finance the acquisition and has received
strong support from the banking sector. The company currently has a $1.2
billion, five-year committed credit facility, scheduled to mature in 2009. There
have been no borrowings under this agreement. The acquisition and upcoming debt
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maturities of the combined company are expected to be financed through current
bank agreements and with new committed bank facilities.
In addition to reimbursing the $40 million termination fee paid by Maytag to
Triton, Whirlpool has agreed to pay up to $15 million to assist Maytag in
retaining key employees. Whirlpool also has agreed to pay Maytag a "reverse
break-up fee" of $120 million under certain circumstances in the unlikely event
of failure to obtain regulatory clearance.
Maytag's shareholders are expected to vote on the transaction before the end of
the year. Whirlpool expects the transaction to close as early as the first
quarter of 2006, following approval from Maytag shareholders and regulatory
clearance.
Lazard serves as financial advisor; Wachtell, Lipton, Rosen & Katz serves as
legal advisor; and Cleary Gottlieb Steen & Hamilton serves as special legal
counsel to Maytag. Greenhill & Company, Weil Gotshal & Manges LLP, Howrey LLP,
and The Boston Consulting Group serve as advisors to Whirlpool.
About Whirlpool Corporation
---------------------------
Whirlpool Corporation is the world's leading manufacturer and marketer of major
home appliances, with annual sales of over $13 billion, 68,000 employees, and
nearly 50 manufacturing and technology research centers around the globe. The
company markets Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other
major brand names to consumers in more than 170 countries. Additional
information about the company can be found at www.whirlpoolcorp.com.
About Maytag Corporation
------------------------
Maytag Corporation is a $4.7 billion home and commercial appliance company
focused in North America and in targeted international markets. The
corporation's primary brands are Maytag(R), Hoover(R), Jenn-Air(R), Amana(R),
Dixie-Narco(R) and Jade(R).
Whirlpool Additional information:
---------------------------------
This news release contains forward-looking statements that speak only as of this
date. Whirlpool disclaims any obligation to update such information.
Forward-looking statements include, but are not limited to, statements regarding
expected earnings per share, cash flow, and material costs for the full year
2005, as well as the expected consequences of enacted price increases. Although
Whirlpool believes that the expectations reflected in the forward-looking
statements are reasonable, it can give no assurance that those expectations will
prove to have been correct. Many factors could cause actual results to differ
materially from Whirlpool's forward-looking statements. Among these factors are:
(1) the cost of raw materials and components, especially steel and the impact of
rising oil prices; (2) the financial impact of Whirlpool's announced price
changes will be dependent upon such factors as market conditions, the strength
of consumer demand for Whirlpool's products, and other factors outside of
Whirlpool's control such as the general economic conditions prevailing at the
time the new pricing goes into effect; (3) rising worldwide transportation costs
due to historically high and volatile oil prices, capacity constraints, and
other factors; (4) the ability to gain or maintain market share in an intensely
competitive global market; (5) the strength of new and established Asian
competitors in the United States and abroad; (6) the success of Whirlpool's
global business strategy; (7) Whirlpool's global operating platform initiatives;
(8) the success of the Latin American businesses operating in challenging and
volatile environments; (9) continuation of Whirlpool's strong relationship with
Sears Holdings Corporation in North America, which accounted for approximately
17% of consolidated net sales of $13 billion in 2004; (10) currency exchange
rate fluctuations; (11) social, economic and political volatility in developing
markets; (12) continuing uncertainty in the North American, Latin American,
Asian and European economies; (13) the effectiveness of the series of
restructuring actions Whirlpool has announced and/or completed through 2004;
(14) U.S. interest rates; (15) changes to the obligations as presented in the
contractual obligations table; (16) changes in the funded position of the U.S.
pension plans; (17) continued strength of the U.S. builder industry; (18) the
threat of terrorist activities or the impact of war; (19) Whirlpool's estimate
of its annual effective tax rate of approximately 31.7%; and (20) the ability of
Whirlpool and Maytag to satisfy the conditions to consummation of the merger
agreement between them, including Maytag shareholder approval and regulatory
clearances, the timing of such satisfaction and in the event the merger is
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completed, Whirlpool's ability to realize expected benefits and the timing of
such realization.
Maytag Additional Information:
------------------------------
This document includes statements that do not directly or exclusively relate to
historical facts. Such statements are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements include
statements regarding benefits of the proposed transactions, expected cost
savings and anticipated future financial operating performance and results,
including estimates of growth. These statements are based on the current
expectations of management of Maytag. There are a number of risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements included in this document. For example, with respect
to the transaction with Whirlpool (1) Maytag may be unable to obtain shareholder
approval required for the transaction; (2) conditions to the closing of the
transaction may not be satisfied or the merger agreement may be terminated prior
to closing; (3) Maytag may be unable to obtain the regulatory approvals required
to close the transaction, or required regulatory approvals may delay the
transaction or result in the imposition of conditions that could have a material
adverse effect on Maytag or cause the parties to abandon the transaction; (4)
Maytag may be unable to achieve cost-cutting goals or it may take longer than
expected to achieve those goals; (5) the transaction may involve unexpected
costs or unexpected liabilities; (6) the credit ratings of Maytag or its
subsidiaries may be different from what the parties expect; (7) the businesses
of Maytag may suffer as a result of uncertainty surrounding the transaction; (8)
the industry may be subject to future regulatory or legislative actions that
could adversely affect Maytag; and (9) Maytag may be adversely affected by other
economic, business, and/or competitive factors. Additional factors that may
affect the future results of Maytag are set forth in its filings with the
Securities and Exchange Commission ("SEC"), which are available at
www.maytagcorp.com. Maytag undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Additional Information Relating to the Merger and Where to Find It
------------------------------------------------------------------
Whirlpool and Maytag will file a prospectus/proxy statement with the SEC in
connection with the proposed transaction. Investors are urged to read any such
prospectus/proxy statement, when available, which will contain important
information. The prospectus/proxy statement will be, and other documents filed
by Whirlpool and Maytag with the SEC are, available free of charge at the SEC's
website (www.sec.gov) or from Whirlpool by directing a request to Whirlpool
Corporation, 2000 North M-63, Mail Drop 2800, Benton Harbor, MI 49022-2692,
Attention: Larry Venturelli, Vice President, Investor Relations, or from Maytag
Corporation's Web site at www.maytagcorp.com. Neither this communication nor the
prospectus/proxy statement, when available, will constitute an offer to issue
Whirlpool common stock in any jurisdiction outside the United States where such
offer or issuance would be prohibited -- such an offer or issuance will only be
made in accordance with the applicable laws of such jurisdiction.
Whirlpool, Maytag and their respective directors, executive officers, and other
employees may be deemed to be participating in the solicitation of proxies from
Maytag stockholders in connection with the approval of the proposed transaction.
Information about Whirlpool's directors and executive officers is available in
Whirlpool's proxy statement, dated March 18, 2005, for its 2005 annual meeting
of stockholders. Information about Maytag's directors and executive officers is
available in Maytag's proxy statement, dated April 4, 2005, for its 2005 annual
meeting of stockholders. Additional information about the interests of potential
participants will be included in the prospectus/proxy statement Whirlpool and
Maytag will file with the SEC.
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