The move continues the transformation of Vitro, which once had 26 businesses and now has four, concentrated on its core business of glass-making.The company said selling washing machines and refrigerators in Mexico was no longer a strategic priority, and it hoped to use the cash generated to acquire glass manufacturers, particularly in Europe.The deal also ends what was Whirlpool's only joint venture and gives it complete control over one of the largest white goods manufacturers in Mexico.Financial details were not disclosed, but the value of the Mexican company, which has annual sales of about Dollars 600m, was placed by negotiators at around Dollars 550m, implying a price of Dollars 280.5m for Vitro's stake.The transaction will strengthen Vitro, as all Vitromatic's debt had previously appeared on its balance sheet.
Jose Domene, Vitro chief operating officer, denied the divestiture had been aimed at raising cash for the payment of Dollars 175m on a eurobond due in May, saying that the company had earmarked sufficient cash to make the payment.
He said instead the company wanted to use the cash for strategic acquisitions to reduce its dependence on commodity glass-making businesses and move into higher-margin speciality glass businesses. "We want to invest in higher-margin products. We also want to diversify geographically, because we are highly concentrated in North America. The US has 24 per cent of world sales of flat glass and Europe has 25 per cent, so we want to be in Europe."
In morning trading in Mexico City, Vitro was down 4 centavos at 9.25 pesos. In New York, Whirlpool was 1.6 per cent higher at Dollars 67.10.