Radio age research, manufacturing, communications, broadcasting, television (1941)

Two RCA Activities Join a New Corporation R< .CA's stove and air conditioning departments have become part of a new corporation established in Sep- tember by agreement among RCA, the Whirlpool Cor- poration and the Seeger Refrigerator Company. The new organization, known as the Whirlpool-Seeger Cor- poration, will manufacture and market major home appliances, including home laundry equipment, refrig- erators, stoves and air conditioners, bearing the brand name "RCA-Whirlpool." Details of the new association were worked out in early summer by the three companies and were ap- proved subsequently by Whirlpool and Seeger stock- holders. In a letter to Whirlpool stockholders in July, Elisha Gray, President of the Whirlpool Corporation, stated that the new company would have total assets of approximately $130,000,000, and a net worth of about $85,000,000, and that it would own and operate the businesses carried on by Seeger and Whirlpool, plus the stove and air conditioning divisions of RCA. The Seeger Refrigerator Company has for many years manufactured the "Coldspot" refrigerators and freezers sold by Sears, Roebuck and Company. The Whirlpool Corporation has manufactured the "Ken- more" home laundry equipment sold by Sears, and since World War II has manufactured and sold home laundry equipment under the "Whirlpool" trademark through dealers and distributors. RCA's gas and electric stoves have been manufactured and sold under the trademark "RCA Estate," while its room air conditioners have been sold with the trademark "RCA." Explains Reason for Merger In a subsequent letter to Whirlpool stockholders prior to a special meeting held in September at which the merger was approved, Mr. Gray explained that "there are compelling economic reasons which justify the proposed merger." "Trends in the appliance industry clearly indicate that success depends upon aggressive research, low cost manufacturing and comprehensive distribution," he said. "All of these requirements are best realized, in our opinion, through the larger volume and the broader lines which the merged company can offer." After citing experience of the past fifteen years, during which, Mr. Gray wrote, only 8 out of 25 single or limited line manufacturers offering laundry equip- ment had survived as independents, he added: "We believe that the proposed merger will put the new company in a far stronger position to realize the economies of manufacture and distribution and to main- tain a favorable competitive relationship to the larger companies which have had such a marked success over the past 15 years." Sears, Roebuck, a stockholder in both Whirlpool and Seeger, continues as such in the new company. At the same time, RCA has a stock interest in the new company, but the total holdings of both RCA and Sears, amount to less than 50 percent of the total outstanding stock. By agreement between RCA and Sears, the letter said, the common stock owned by each in excess of 20 percent is to be voted by the President of Whirlpool- Seeger. The officers of the new corporation include Walter G. Seeger as Chairman of the Board and Mr. Gray as President and chief executive. Mr. Gray explained that the balance of the new company's management personnel would be selected principally from the merging businesses, and that both Sears and RCA would have minority representation on the Board of Directors. Frank M. Folsom, President of RCA, and Charles M. Odorizzi, Executive Vice-President, Corporate Staff, RCA, are members of the Board of Directors of the new company. Stock Arrangements According to the statement to Whirlpool stock- holders prior to the September meeting it was expected that the new corporation would, upon the merger be- coming effective, have outstanding 5,792,816 shares of common stock with a par value of $5 per share, and 211,122 shares of 4V4 percent cumulative convertible preferred stock with a par value of $80 per share. To Whirlpool stockholders, 3,086,024 shares of the common stock are being issued on a share for share basis. To Seeger stockholders go 1,548,229 shares of com- mon stock and 211,122 shares of preferred stock of Whirlpool-Seeger. These are being issued in the ratio of 1% shares of common stock and 3/16 share of pre- ferred stock for each outstanding share of Seeger com- mon stock. To RCA go 1,158,563 shares of Whirlpool-Seeger common stock in exchange for cash, the RCA stove, and air conditioning businesses, and an agreement cover- ing use of the trademark "RCA" in combination with "Whirlpool" on products of the new company. 14 RADIO AGE