China’s Haier Group agreed to buy
General Electric (GE) appliance business for $5.4 Billion. This will be the
country biggest acquisition of an overseas electronics company. Buying a
century old business that makes $8500 refrigerators from the likes of GE would
underscore the rise of a Chinese company once known for making cheap fridge for
college dormitories.
It also highlights Haier global
ambitions as the acquisition would help the company expand in the US, one the
markets it is trying to focus on besides Europe and Japan. This acquisition
surpasses state backed Tsinghua Holding plans for a $3.8 Billion investment in
Western Digital Corp announced last year and Lenovo Group $2.8 Billion acquisition
of Motorola Mobility Group in 2014.
Midea is China biggest manufacturer
of appliances with a 17% share of the country market in 2015 followed by
Qingdao Haier with 7.9% Euromonitor International Data show. Haier had a 11%
share of the US appliance market last year. GE and Haier will also cooperate in
industrial internet, healthcare and advanced manufacturing. Both companies will
also work together to develop and grow affordable consumer health initiatives
in China.
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