(London Post) The Chinese appliance giant has taken a big step towards becoming a global household name after securing General Electric’s century-old appliance business in a multi-billion-dollar deal. Qingdao Haier, the world’s biggest appliance maker took a big step on Friday towards cementing its footprint in the global market after securing the takeover of US industrial giant General Electric’s (GE) appliance business.
The $5.4 billion (4.95 billion euro) deal marks one of the largest Chinese acquisitions of a US firm to date. It also illustrates just how far Haier has come from its humble days as an upstart that grew out of a close-to-broke refrigerator factory three decades ago. Today, the firm controls more than 10 percent of the global household appliance market, and raked in $32.6 billion in 2014 revenue.
The move is sure to please the Chinese government, to which Haier has close ties, which is trying to re-balance its economy more towards consumption and away from the infrastructure and investment-driven model of the past.
The sale is the latest step by GE’s CEO Jeff Immelt to return the 123-year-old company to its industrial roots, and refocus on advanced industry technology and manufacturing. In the past years, Immelt has offloaded a number of the units the company had accumulated since the 1990s, in fields as varied asconsumer finance , media and plastics.
GE said that the sale had been green-lighted by its board of directors and Haier, but remained subject to Haier shareholder and regulatory approval.
However, Haier was not GE’s first choice. Swedish rival Electrolux had all but signed a $3.3-billion deal, when it was nixed by US antitrust authorities, who worried it would hand the Stockholm-based manufacturer a US market share of some 40 percent.
Hoping to avoid a repeat, Immelt set his sights on Asia, where a buyer was considered more likely to get approval from Washington.
For Haier, the offer complemented its ambitions of becoming a “world brand,” and represented an opportunity to gain a firm footing on the US appliance market, where it currently controls just around one percent.
“The deal will create more diversified and better quality home appliance products for world consumers that better suit their needs,” said the company in a statement following Friday’s announcement.
Haier and GE also said they agreed to form a strategic partnership to cooperate in areas such as the Internet, healthcare, and advanced manufacturing.
GE’s Immelt hailed the agreement as “a good deal which will benefit our investors, customers and employees.”
pad/jd (AP, AFP)