Exhibit 99.2
WHIRLPOOL CORPORATION'S RESPONSE TO
FREQUENTLY ASKED QUESTIONS
ACQUISITION PRICE
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QUESTION 1. WHY WAS WHIRLPOOL'S OFFER PRICE $7 HIGHER THAN TRITON'S?
Answer: Our offer provides a reasonable premium to reward the Maytag
shareholders for the potentially longer and more substantive
regulatory review process than Triton (a private equity
consortium) underwent.
QUESTION 2. WHY DID WHIRLPOOL INCREASE ITS OFFER PRICE FOR MAYTAG?
Answer: We made two formal offers for Maytag after first giving notice
of our intent to bid. Our ultimate price of $21 per share
provides fair value for Maytag shareholders, while also
addressing conditions established by the Maytag board of
directors. The price appropriately provides an opportunity for
Whirlpool shareholders, including Maytag shareholders who
retain the Whirlpool stock they receive in the merger, to
realize the value we expect to be created by the efficiencies
and innovation from the combined company.
QUESTION 3. WHY DID WHIRLPOOL STRUCTURE THE DEAL 50% EQUITY AND 50% STOCK?
Answer: We believe the mix of stock and cash provides financial
flexibility for the combined company and allows existing
Maytag shareholders the opportunity to participate in the
value-creating opportunities from the combined company.
QUESTION 4. WHAT WILL MAYTAG SHAREHOLDERS RECEIVE IN EXCHANGE FOR THEIR
SHARES?
Answer: In the merger, each share of Maytag common stock will be
exchanged for (a) $10.50 in cash and (b) between 0.1144 and
0.1398 of a share of Whirlpool common stock. We refer to the
fraction of a share of Whirlpool common stock to be issued for
each share of Maytag common stock as the "Exchange Ratio." The
Exchange Ratio will be determined by reference to the volume
weighted average trading price per share of Whirlpool common
stock on the New York Stock Exchange for the 20 consecutive
full trading days ending on the second trading day prior to
the effective time of the merger, which we refer to as the
"Reference Price."
The Exchange Ratio will adjust to ensure that the fractional
share of Whirlpool common stock received will be equal to
$10.50 divided by the Reference Price, so long as the
reference price is between $75.10 and $91.79. If the Reference
Price is less than $75.10, the exchange ratio will no longer
adjust, and Maytag shareholders will receive 0.1398 of a share
of Whirlpool common stock. If the Reference Price is greater
than $91.79, the Exchange Ratio will no longer adjust, and
Maytag shareholders will receive 0.1144 of a share of
Whirlpool common stock.
This type of adjustment mechanism is referred to as a floating
exchange ratio with a "collar" of +/- 10% around $83.45, the
volume weighted average price of Whirlpool common stock on the
NYSE on August 12, 2005, the date the Maytag board of
directors first declared that Whirlpool's offer was a
"superior company proposal" compared to the existing Triton
merger agreement.
Maytag shareholders will not receive any fractional shares of
Whirlpool common stock in the merger. Instead, they will be
entitled to receive cash, without interest, for any fractional
share of Whirlpool common stock they might otherwise have been
entitled to receive, based on a portion of the proceeds from
the sale of all fractional shares in the market.
QUESTION 5. HOW DID WHIRLPOOL ARRIVE AT THE $120M REVERSE BREAK-UP FEE?
Answer: Transactions of this nature are often structured with some
type of reverse breakup fee. In our case, we negotiated the
terms in a manner that was deemed mutually satisfactory with
Maytag. We also agreed to provide up to $15 million to assist
Maytag in retaining key employees.
FINANCING
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QUESTION 1. HOW WILL WHIRLPOOL FINANCE THE ACQUISITION?
Answer: The company 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 facility. The acquisition
and upcoming debt maturities of the combined company are
expected to be financed through current bank facilities and
with new committed bank facilities.
QUESTION 2. WHAT IS THE EXPECTED IMPACT ON WHIRLPOOL'S DEBT RATING ONCE IT
ACQUIRES MAYTAG?
Answer: We expect that the acquisition will generate significant
efficiencies that are expected to be realized in the near
term. We expect to retain an investment grade credit rating.
SAVINGS
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QUESTION 1. WHAT ARE WHIRLPOOL'S EXPECTED FINANCIAL BENEFITS FROM THE
ACQUISITION?
Answer: We anticipate that significant efficiencies can be gained in
every part of the value chain, for example:
o Product Manufacturing
o Global Procurement
o Infrastructure and Support Areas
o Product Development and Research
o Asset Utilization
These efficiencies will benefit our trade customers and
consumers. Achieving these efficiencies will require some
level of investment and one-time costs, but we believe they
can be realized in the near term.
QUESTION 2. GIVEN THE SIGNIFICANT SYNERGIES WHIRLPOOL IS EXPECTING,
SHOULD LAYOFFS BE ANTICIPATED? WHERE ELSE WOULD THE
SYNERGIES COME FROM?
Answer: Synergies will come from all areas across the value chain,
including procurement, distribution, and research and
development. Until the merger is completed, Maytag will
continue to operate its businesses independently, and we are
not currently in a position to discuss the specifics of how
these efficiencies will be derived.
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REGULATORY CLEARANCE/ANTI-TRUST
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QUESTION 1. WHY IS WHIRLPOOL CONFIDENT THAT IT WILL GAIN REGULATORY
CLEARANCE?
Answer Our internal and external experts reviewed the appliance
industry dynamics and have confirmed our conviction that there
is no plausible concern that competition would diminish in any
product category in which the companies currently compete.
Competition in the appliance industry is intense and nothing
about an acquisition of Maytag by Whirlpool can change that.
Consumers will benefit from this transaction through the
efficiencies that are unique to this combination. There will
be cost savings, increased innovation and quality.
QUESTION 2. HOW MIGHT A WHIRLPOOL-MAYTAG COMBINATION IMPACT THE
MARKETPLACE?
Answer An acquisition of Maytag by Whirlpool will further enhance an
already dynamic competitive environment, and increase
efficiency of production in the appliance industry. The
analysis we have conducted on this confirms this point for all
product categories in which both Whirlpool and Maytag compete.
Therefore, we are highly confident that we will receive
regulatory clearance.
QUESTION 3. WHAT IS THE TIMETABLE FOR THE ANTITRUST PROCESS?
Answer: We expect both parties to file the Hart-Scott-Rodino*
notification and report forms promptly. We anticipate working
cooperatively with the government and plan to promptly provide
information to help the government make a decision. There are
many variables within this review process, and while it is
simply too early to make definitive predictions on timing, we
do believe that the transaction could close as early as the
first quarter of 2006.
*An antitrust law requiring notification to the federal
government of certain transactions. The filing marks the
beginning of the regulatory review period.
CURRENT BUSINESS
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QUESTION 1. IN LIGHT OF THE PENDING TRANSACTION, WHAT DOES THIS MEAN
FOR WHIRLPOOL'S CURRENT INTERNAL STRATEGIES?
Answer: We have a focused group of internal and external resources
dedicated to working on the Maytag project. The vast majority
of our employees continue to focus on executing the Whirlpool
business plans every day. They continue to do an excellent job
of creating products and services that enhance our customers'
lives. We will continue to fund and execute on our strategies.
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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
completed, Whirlpool's ability to realize expected benefits and the timing of
such realization.
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.
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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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