UPDATE 1-Whirlpool buys 51 pct stake in China white goods maker
* To acquire 51 pct stake in Hefei Sanyo for $552 mln
* Tu buy Sanyo Electric's 29.51 pct stake in co initially
* Remaining stake to be acquired through private placement
Aug 13 (Reuters) - Home appliance maker Whirlpool Corp said it will acquire a controlling stake in Hefei Rongshida Sanyo Electric Co Ltd for $552 million to expand in China's fast-growing market for washing machines and fridges.
Hefei Sanyo was set up in 1994 as a joint venture between Japan's Sanyo Electric Co, now a unit of Panasonic Corp , and Heifei State-Owned Assets Holding Company Ltd, the investment arm of the local state government.
Whirlpool, known for its Maytag and KitchenAid brands, said it would buy a 51 percent stake in the company by acquiring Sanyo Electric's stake and through a private placement.
"Whirlpool has a strong presence in China's higher tier segments, this acquisition allows the company to build on, complement, and grow its position in the emerging Chinese market," Chief Executive Jeff Fettig said in a statement.
The deal will help the world's largest appliance maker boost its business in Asia, which contributed just 5 percent to its total sales of $4.7 billion the second quarter.
Hefei Sanyo makes washers, refrigerators and microwave ovens under the Sanyo, Royal Star and Diqua brands and competes with larger Chinese firms such as Haier Electronics Group Co Ltd and GD Midea Holding.
The company reported revenue of $636 million for 2012.
Whirlpool said its China unit would initially buy Sanyo's 29.51 percent stake in the company through a share purchase deal. It will then acquire the remaining shares through a private placement.
Whirlpool China will have to pay a break-up fee of $20 million if it fails to close the transaction.
The U.S. company said it plans to fund the purchase with cash on hand or debt.