This Case is about Finance

Publication Date: 10/15/2015

The vice president of the organization integral in this case has been negotiating a potential acquisition with Jackie Jin, the chairperson of a top Chinese appliance maker called Hefei Rongshida Sanyo Electric Company (Hefei Sanyo), for nearly six months when unexpectedly Hefei Sanyo’s stock price soared 25% in the first two weeks of May 2013. The unexpected price increase not only raised the likely acquisition cost for an ownership position in Hefei Sanyo, but also meant that Whirlpool had lost the extravagance of both time and secrecy. Lee had to immediately determine the best way to structure a deal that enabled Whirlpool to get controlling possession standing (“>>50%) in the state-owned enterprise (SOE)-something that had not been done before; how much to cover the stake; and the best way to ensure commercial, regulatory, and political acceptance for the deal.

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