Midea Group and Qing­dao Haier both bid­ding for GE ap­pli­ances unit

China Daily (Canada) - - ACROSS AMERICAS - By BLOOMBERG

Midea Group Co and Qing­dao Haier Co are among suit­ors that sub­mit­ted bids for Gen­eral Elec­tric Co’s home-ap­pli­ances busi­ness, af­ter a sale to Elec­trolux AB fell apart last month, peo­ple with knowl­edge of the mat­ter said.

The unit has at­tracted sep­a­rate of­fers of more than $3 bil­lion from the Chi­nese com­pa­nies, the peo­ple said, ask­ing not to be iden­ti­fied as the in­for­ma­tion is pri­vate. Midea, China’s big­gest maker of air con­di­tion­ers and rice cookers, is work­ing with banks to ar­range fi­nanc­ing for a pur­chase, two of the peo­ple said. The Foshan-based com­pany and Shan­dong-based Haier sub­mit­ted of­fers last week along with at least two other po­ten­tial buy­ers.

GE is seek­ing an­other suitor for the cen­tury-old ap­pli­ances unit af­ter the Elec­trolux deal col­lapsed fol­low­ing op­po­si­tion from the United States Jus­tice Depart­ment. The busi­ness is likely to fetch more this time than the $3.3 bil­lion Elec­trolux agreed to pay.

The quick turn­around from the failed Elec­trolux deal sup­ports GE Chief Ex­ec­u­tive Of­fi­cer Jef­frey Im­melt’s ef­fort to re­shape the Fair­field, Con­necti­cut-based com­pany around in­dus­trial-man­u­fac­tur­ing op­er­a­tions. He’s sell­ing the con­sumer-ap­pli­ances busi­ness along with the bulk of GE’s lend­ing arm, while ex­pand­ing divi­sions mak­ing prod­ucts such as gas tur­bines, oil­field equip­ment and jet en­gines.

A sale to an Asian buyer is seen as more likely to get reg­u­la­tory ap­proval, be­cause Asian com­peti­tors in this in­dus­try gen­er­ally have a lower mar­ket share, RBC Cap­i­tal Mar­kets LLC said last month. Im­melt said at a De­cem­ber in­vestor meet­ing that there has been “sig­nif­i­cant in­bound in­ter­est” in the busi­ness and that he ex­pected to reach a deal early this year.

Midea is China’s big­gest man­u­fac­turer of con­sumer ap­pli­ances, with a 17.1 per­cent mar­ket share in 2015, fol­lowed by Haier with 7.9 per­cent, Euromon­i­tor In­ter­na­tional data showed. Haier had a 1.1 per­cent share of the US con­sumer ap­pli­ances mar­ket last year, ac­cord­ing to Euromon­i­tor.

Haier Group Corp plans to ex­pand in the North Amer­ica mar­ket, ac­cord­ing to a rep­re­sen­ta­tive for the group, who de­clined to com­ment on whether the com­pany has sub­mit­ted a bid for GE’s home-ap­pli­ances busi­ness. Any of­fer for the unit would be made by the group, rather than its listed units, the rep­re­sen­ta­tive said on Tues­day. Rep­re­sen­ta­tives for GE and Midea de­clined to com­ment.

This is at least GE’s third at­tempt to un­load the ap­pli­ances busi­ness, which in­tro­duced an elec­tric toaster in 1905 and a home elec­tric wash­ing ma­chine in 1930. The com­pany said in 2008 it would ex­plore op­tions to sell or spin off the busi­ness over con­cerns it was too heav­ily tied to the tu­mul­tuous US mar­ket, but the ef­fort was stymied by the fi­nan­cial cri­sis.

JING WEI / FOR CHINA DAILY

The stand of GE at an in­dus­try expo in Shang­hai.

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