Haier buys General Electric’s appliance business
Print Edition
HAIER Group, the world’s biggest home appliance maker, is buying General Electric Co’s appliance business for US$5.4 billion to expand its US and global presence.
The acquisition announced yesterday comes as Haier tries to transform itself into a premium brand. GE is shifting emphasis from traditional businesses such as appliances, in which it has been a prominent presence for more than a century, to higher-technology areas such as medical equipment and clean energy.
The two companies also agreed to form a strategic partnership to cooperate in areas such as the Internet, health care, and advanced manufacturing. They said the sale is subject to regulatory and anti-trust approvals in relevant countries.
The purchase is the third in a string of multibillion-dollar foreign acquisitions this week by Chinese buyers.
On Tuesday, conglomerate Wanda Group said it was buying Hollywood’s Legendary Entertainment for US$3.5 billion. The previous day, a state-owned chemical company announced the purchase of a German manufacturer for US$1 billion.
Chinese companies are on a buying spree abroad, looking for technology and brands to improve their competitive position at home and speed their global expansion.
Chinese buyers have announced 23 outbound acquisitions so far this year, totaling US$12.3 billion, up from US$2.9 billion in the same period last year, according to Dealogic, a financial information provider.
Haier, headquartered in the eastern city of Qingdao, makes a wide range of refrigerators, washing machines and other home appliances. It reported 2014 revenue of US$32.6 billion. It operates a string of 21 industrial parks worldwide.
Its purchase of GE Appliances is the biggest global corporate acquisition so far this year and the third-biggest in the United States by a Chinese buyer to date, according to Dealogic.
Haier said the GE acquisition would be carried out by its Qingdao Haier Co Ltd unit, a publicly traded entity of which Haier owns 41 percent.
GE Appliances, headquartered in Louisville, Kentucky, reported US$5.9 billion in 2014 revenue. It has 12,000 employees, 96 percent of them in the US.
The two companies said the deal will give GE Appliances more access to the growing Chinese consumer market. The purchase includes GE Appliances’ 48.4 percent stake in Mabe, a Mexican appliance company with which it has operated a joint venture for 28 years.
“This strategic alliance provides a new starting point for both Haier and GE and I am confident that this partnership will deliver enhanced value to the stakeholders of both companies,” Haier Group Chairman Zhang Ruimin said.
Zhang is credited with building Haier out of a bankrupt refrigerator factory after he was assigned by the Qingdao city government to manage it in 1984.
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