Haier to buy GE's appliances business

Haier Group, a major manufacturer of household appliances, has agreed to buy General Electric's appliances business for $5.4 billion in cash. It is China's largest-ever acquisition of an overseas electronics company.

Qingdao-based Haier signed a memorandum of understanding on Jan 15 with GE in the United States, according to a statement. The deal will be completed in the second quarter, pending regulatory approval.

The company said the operations team at GE's appliances unit will remain unchanged. Haier is authorized to use GE's brand for at least 40 years.

In 2014, GE announced that it planned to sell its century-old appliances units to Electrolux AB, the Swedish appliance maker, for $3.3 billion.

However, the deal collapsed in December because of opposition from the US Justice Department, forcing the electronics giant to seek another buyer.

Haier and another Chinese home appliance company, Midea Group, submitted bids.

Zhang Yanbin, assistant director of All View Cloud, a Beijing consultancy specializing in home appliances, says if the transaction is completed, it will be the largest acquisition by a domestic appliance maker in an overseas market.

"It is inspiring news for the Chinese home appliances industry," he says. "The acquisition, which includes manufacturing, research and development, marketing and other links of GE's appliance unit, will help Haier expand in the US market."

The Chinese home appliances market is almost saturated, so domestic makers are looking overseas to find new business growth points.

With a 10.2 percent market share, Haier was the world's largest household appliances brand in 2014 for the sixth straight year, according to Euromonitor, a market research company in London.

The deal, which will be funded through Haier's capital and loans, will need anti-trust approval from authorities in the US, Mexico, Canada and Colombia.

Contact the writers through fanfeifei@chinadaily.com.cn

(China Daily Africa Weekly 01/22/2016 page29)