Baker & McKenzie Advises Whirlpool Corporation on Successful Post-Acquisition Strategy
1 August 2011
Chicago, USA, 1 August 2011 – Baker & McKenzie acted as lead counsel for Whirlpool on its successful post-acquisition strategy.
In 2006, Whirlpool Corp. purchased Iowa-based company Maytag for USD1.7 billion, making it the largest home appliance maker in the world. In 2008, Whirlpool sought to negotiate changes in the medical benefits Maytag retirees claimed they were owed under a former collective bargaining agreement. When the Union refused to bargain, Whirlpool filed a defendant class action lawsuit in 2008 against the United Auto Workers ("UAW") as the class representative of the retired Maytag workers to modify the benefits. The case went to trial in December 2010 in the U.S. District Court in the Southern District in Iowa.
Bringing to bear wide-ranging legal know-how and extensive ERISA and labor litigation experience, the Baker & McKenzie team led by Partner Douglas Darch and assisted by associates Miriam Geraghty and Meagan LeGear (Chicago) developed a successful post-acquisition integration strategy for Whirlpool. After a three-year legal fight, the court ruled in favor of our client in July 2011. The court found that the union failed to present evidence that the company had agreed to vest medical benefits of the retirees. Consequently, the retirees’ benefits expired in 2008 when the parties’ collective bargaining agreement expired and Whirlpool had the unilateral right to enroll class members into the Whirlpool Corporation Group Benefit Plan.
Mr. Darch commented on the transaction, “Harmonizing employee benefits both before and after a merger is challenging. Our clients are under pressure to integrate diverse benefits plans for existing and retired employees. Thrashing out these matters can be complex, but is critical to help achieve strategic goals. In this case our client was able to streamline Maytag’s benefits and offer retired employees a health care plan that is superior to plans offered by 75% of Fortune 500 companies.”