NEW YORK (AP) — Fitch Ratings warned Monday that it could lower Whirlpool Corp.‘s credit rating after the appliance maker announced a plan to buy Italian rival Indesit for more than $1 billion.
Whirlpool, which owns the Maytag, KitchenAid and other brands, said last week that the deal to buy Indesit will help it expand in Europe. Indesit makes washing machines, dryers, dishwashers, ovens and other appliances. The acquisition is expected to close by the end of the year.
Fitch said it is putting Whirlpool on “Rating Watch Negative” because the acquisition will increase the company’s debt. Fitch said it may lower the company’s credit rating down one notch to “BBB-” from “BBB.” A “BBB-” rating is still considered investment grade, but is one step away from being considered a “non-investment grade” and can signal that it is at a higher risk of defaulting on its loans.
Fitch said it will meet with Whirlpool executives in the next month to review its finances.
Fitch also said that while the deal will help Whirlpool expand its business in Europe, demand for appliances in the region is “relatively weak.”
A representative from Whirlpool did not immediately respond to a request for comment.
Shares of the Benton Harbor, Michigan-based company fell $1.75, or 1.2 percent, to $139.01 in midday trading Monday. Its shares have fallen more than 10 percent in 2014.