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GE to sell appliances business to China's Haier for $5.4 billion

GE to sell appliances business to China's Haier for $5.4 billion

Postby smix » Sat Jan 16, 2016 1:40 pm

GE to sell appliances business to China's Haier for $5.4 billion

URL: http://www.reuters.com/article/us-ge-di ... SKCN0UT0AG
Category: technologyNews
Published: Fri, 15 Jan 2016 20:07:17 GMT

Description: (Reuters) - Haier Group said it would buy General Electric Co's appliance business for $5.4 billion, the Chinese company's latest attempt to boost its presence in the lucrative United States market. The deal comes weeks after GE walked away from a deal to sell the business to Sweden's Electrolux for $3.3 billion, following months of opposition from U.S. antitrust regulators. GE said the deal values the appliance business at 10 times last 12 months earnings before interest, taxes, depreciation, and amortization (EBITDA). Whirlpool Corp is valued at 7.7 times. GE shares fell 2.3 percent in premarket trading. GE said earlier this week it would shift its headquarters to Boston, a move aimed at lowering its tax bill and tapping talent in city that is fast becoming a tech hub. For Haier, the deal means ownership of a century-old appliance business that makes refrigerators, freezers, clothes washers and dryers across brands such as Monogram, Café, Profile and Artistry. The business trails only Whirlpool Corp in the U.S. white goods market and reported revenue of $5.9 billion last year. The deal, Haier's biggest ever, will give a big boost to its U.S. business, which held less than 5 percent of the market last year. The company has been mostly present in the highly competitive, so-called "value segment" of the U.S. market and analysts expressed concern about the impact its bigger presence would have on the pricing dynamics. "Even if Haier doesn't have a history of dumping prices in the United States, as for example LG and Samsung has, this is still an unknown player, a Chinese player," DNB Bank ASA analyst Christer Magnergard told Reuters. "(Haier) may have a somewhat different agenda than just having high profitability in the United States in 2016." Haier said the transaction includes GE Appliances' 48.4 percent stake in Mabe, a Mexican appliance company that has a joint venture and a sourcing relationship with the business for 28 years. The deal will be subject to customary regulatory filings in China and antitrust approvals in the United States, Mexico and Argentina, said a person authorized to speak on behalf of Qingdao Haier Co Ltd, the Haier unit making the purchase. The deal is also to be approved by shareholders of Qingdao Haier as well as KKR and Haier Group, who jointly own 50.8 percent of the company, the person said. Haier will continue to use the GE Appliances brand and retain the business's headquarters in Louisville, Kentucky and its current management team, the companies said. Goldman Sachs was GE's finiancial adviser and Sidley Austin LLP was its legal adviser.
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Re: GE to sell appliances business to China's Haier for $5.4 billion

Postby lindseynicole » Mon Sep 26, 2016 12:41 pm

Many importers do not realize that quality control starts long before production actually begins. In fact, the quality control of an importer begins with the evaluation and selection of your supplier in China. To sum this up, you should be sure that you will not only find the right products, but also find the best suppliers in China

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