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BREAKING NEWS: Ali Group confirms Welbilt merger agreement

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Welbilt will now join the Ali Group roster of companies.

Ali Group has won out in the battle with Middleby Corp to acquire Welbilt and become the largest global catering equipment group.

The European conglomerate and Welbilt are now entering into a definitive merger agreement, after Middleby dropped out of the race this week by refusing to increase its original US$4.3bn offer for the US-based manufacturing group.

Ali Group’s deal is an all-cash transaction for US$24 per share, or approximately US$3.5bn in aggregate equity value and US$4.8bn in enterprise value. The merger agreement has been unanimously approved by the boards of directors of both companies.

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In addition, Carl C. Icahn (and affiliates), who owns 7.7% of Welbilt stock, has entered into a support agreement in favour of the transaction.

The transaction, which is not conditioned on financing, is expected to close in early 2022, subject to the satisfaction of customary closing conditions, including the approval of Welbilt shareholders.

The acquisition will make the merged group the largest in the world, with Welbilt’s pre-Covid turnover totalling about US$1.6bn and Ali Group’s global revenue of around US$2.4bn combining to reach US$4bn, eclipsing pre-pandemic market leader Hoshizaki’s US2.5bn.

Ali Group chairman and CEO Filippo Berti said: “We are pleased to announce this agreement with Welbilt and look forward to combining our highly complementary brands to create a comprehensive product portfolio and enhance our global footprint.”

“We have long admired Welbilt’s heritage, breadth of products, brand strength and management team, and together we will have an expanded range of innovative products. The transaction marks a significant milestone in Ali Group’s history and will position us to better serve our customers and capitalize on attractive growth opportunities. We are excited to welcome Welbilt and its employees to the Ali Group family as we strengthen our global presence and continue to build on our culture of quality and innovation.”

While Welbilt’s president and CEO Bill Johnson commented: “We are excited to reach this agreement with Ali Group, which delivers outstanding value to Welbilt shareholders, provides new opportunities for Welbilt employees and enables Welbilt to benefit from the expertise and resources of Ali Group.

“This transaction provides a compelling and certain cash value to Welbilt shareholders at an attractive premium and will create a global leader in the foodservice equipment and solutions industry with a full range of connectable foodservice solutions for our customers. I want to thank each of our employees for their hard work and dedication to the success of Welbilt, which has positioned us to reach this agreement today. On behalf of the Welbilt board and management team, we are excited to work closely with Filippo and the Ali Group team as we bring our companies together.”

Welbilt also confirmed that it has terminated the previous merger agreement it entered into with Middleby Corp on 20 April 2021. Per the terms of that agreement, Ali Group has paid Middleby a US$110m termination fee on Welbilt’s behalf as agreed to in the Ali Group merger deal.

In light of the Middleby agreement termination, Welbilt is cancelling its 21 July 2021, special stockholder meeting to approve that transaction. The US manufacturer group expects to announce a special stockholder meeting to approve the Ali Group transaction at a later date.

Tags : acquisitionAli GroupbusinessbuyoutmergermiddlebyMiddleby Corporationtakeoverwelbilt
Clare Nicholls

The author Clare Nicholls

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