Whirlpool yesterday increased its offer to buy smaller rival Maytag by $2 to $20 a share, including a $120m "break-up" fee payable to Maytag should the combination of the two US household appliance makers fail to win anti-trust approval.

The move appeared to be a sign that Whirlpool wanted to assure Maytag's board it was prepared to use financial support to back its belief that a combined Whirlpool/Maytag would pass regulatory scrutiny. Whirlpool's proposal trumps an agreed offer of $14 a share from a consortium led by private equity firm Ripplewood.

The development sent Maytag's shares almost 10 per cent higher at $18.66 by midday yesterday in New York. Whirlpool last month added $1 to an existing offer of $17 a share.

Whirlpool has said there is "no plausible concern" about a combination of the largest and fourth-largest appliance makers. It says the new company would not have more than 50 per cent in any one product category. However, critics say this excludes Kenmore-branded appliances made by Whirlpool under licence for department store Sears, and Kenmore is seen by analysts as a key factor in any anti-trust probe.

Whirlpool also argues the US appliance market has become more competitive.