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Antitrust regulators at the Department of Justice on Friday issued a second request for information on Whirlpool Corp.’s proposed purchase of rival appliance maker Maytag Corp. about 30 days after the two companies filed their merger paperwork. The two appliance makers issued a statement early Friday saying the DOJ had made the request, which they said is “typical” in such transactions. Maytag and Whirlpool added they are cooperating fully with the investigation and still plan to close the deal as early as the first quarter. The second request is likely to be broad in scope, as the DOJ is expected to question the potential anti-competitive harm caused by the $2.7 billion merger. The DOJ regulators were assigned the case only two weeks ago, following a nearly monthlong battle with their counterparts at the Federal Trade Commission over jurisdiction in the merger review. Antitrust lawyers for the two companies are expected to attempt to narrow the scope of the investigation, according to other lawyers following the deal. The dominant market share of the two companies and the value of the various brands owned by the nation’s two largest appliance makers will undoubtedly be carefully scrutinized. In the United States, Whirlpool owns (in addition to its eponymous line) KitchenAid, Estate, Gladiator and Roper. Maytag owns Jenn-Air, Jade, Hoover and Amana, as well as a vending line, Dixie Narco. Both manufacturers also supply Sears, Roebuck and Co. with appliances for its Kenmore store brand on a contract basis. Combined market share, including the Kenmore brand, is around 70 percent, according to analysts, but a traditional antitrust review would not include the Kenmore numbers, since that is a competitive contract, according to Mark Schechter, a partner at Howrey, who is Whirlpool’s antitrust counsel. The opinions of customers will weigh heavily on the regulators during the review process, said antitrust lawyers familiar with mergers of this scope. About 65 percent of the appliances in the nation are purchased by four large retail outlets: Sears, Best Buy Co., Home Depot Inc. and Lowe’s Cos. If those four stores feel they have enough influence over the companies to encourage innovation and keep prices low for end users who come to the stores to choose between brands, then the regulators are less likely to try to block the deal. But lawyers who represent competitors, requesting anonymity, say the high market share enjoyed by the top two manufacturers in many markets should lead the regulators to either block the deal or require that some of the smaller brands be sold to foreign competitors who are keen to make inroads into the profitable U.S. market. The antitrust review is expected to take a minimum of six to nine months. Copyright �2005 TDD, LLC. All rights reserved.

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