Home appliance maker Whirlpool Corp said on Monday it would buy Emerson Electric Co's InSinkErator unit, which makes waste disposal equipment and hot water dispensers, for $3 billion to beef up its kitchen equipment offerings.

InSinkErator, which has an over 70% market share in the food waste disposal industry, is a popular household name in the United States. Following the acquisition, InSinkErator will add to Whirlpool's home portfolio of washing machines, refrigerators and dishwashing equipment.

InSinkErator makes food waste disposers that are integrated into kitchen sinks to help breakdown garbage, which then flows directly to wastewater treatment plants or a septic system.

Whirlpool, which plans to fund the deal through cash and debt, said during an investor call that it expects InSinkErator to benefit from a strong replacement cycle and strength in the long-term U.S. housing industry.

Berenberg analyst Philip Buller said Whirlpool can also use InSinkErator to expand its presence outside North America, where waste disposal system penetration rates are much lower.

InSinkErator posted a trailing twelve-month revenue of $595 million as of March end. It was founded in 1938 and was bought by Emerson in 1968.

The deal, expected to close in the fourth quarter, will also help Emerson Electric slim down its structure, following footsteps of other conglomerates, as it works to reposition itself as a technology-focused firm.

"Once upon a time big was great, because you're going into all these emerging markets, which were high growth, you needed a big resource to do it. That's not the story today," said William Blair analyst Nicholas Heymann.

Greenhill & Co. LLC served as the financial adviser for Whirlpool, while Wachtell, Lipton, Rosen & Katz served as the legal counsel.