Bosch is talking to potential advisers about the possibility of making an offer for Whirlpool, which has a market capitalization of about $4.8 billion, one of the sources said.
The sources said it was not certain whether an offer would be made, and asked not to be identified as the matter is confidential.
A spokeswoman for Bosch and Whirlpool said the companies do not comment on “market rumours”. Shares of the US company rose 12.7% in early trading after the Reuters report.
The acquisition of one of the world’s largest white-goods manufacturers will significantly boost Bosch’s home appliance business at a time when competition from Asian rivals is increasing.
Whirlpool has been undergoing a major restructuring in recent years, which has seen its European business folded into a new company controlled by Turkish rival Arcelik and divested of its Middle Eastern and African businesses.
“A potential acquirer can believe in the potential for some future recovery with the right multi-year timeframe and macro backdrop,” said RBC Capital Markets analyst Michael Dahl.
Dahl added that Whirlpool is facing “significant challenges” due to the depressed spending environment.
The potential takeover comes as the world’s largest automotive supplier Bosch is mulling an acquisition to grow its unit that makes large home appliances.
The deal for Whirlpool, whose brands include Ariston, Hotpoint, Ignis and Privilege, will rank among the largest announced deals for a German industrial group.
Reuters reported in March that Bosch was among industrial companies vying to acquire more than $6 billion worth of heating and ventilation assets from Johnson Controls International in the US.
Bosch CEO Stefan Hartung told German business daily Handelsblatt in May that the company is eyeing some major acquisition targets, and that it does not rule out entering into new business areas or global deals.
It told reporters in early June that the group was open to listing some of its divisions on the stock market as it explored financing options for the deal. He did not say which departments.
Whirlpool, a household name known for its large appliances like washing machines and refrigerators, has aimed to expand its customer base in recent years by expanding into smaller appliances like espresso machines and other kitchen gadgets as it grapples with slowing growth.
The Michigan-based company recently said it would cut about 1,000 jobs in an effort to boost profit margins.
Longbow Research analyst David McGregor believes Whirlpool could support a bid at the right price.
Whirlpool has lost nearly 50% of its market value in the past two years. Its Swedish rival Electrolux is down 35% over the same period.
Electrolux shares rose following the report and were trading up about 4.5% at 1040 GMT.
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