Economy Drives Haier To Hold Off On GE Bid: Report
By Alan Wolf -- TWICE, 11/3/2008
SHANGHAI, CHINA — Haier, China's largest major appliance maker, has decided to wait for solid signs of an economic recovery in the United States before making a bid for General Electric's majap unit.
According to a Reuter's report, senior Haier management including chief executive Zhang Ruimin now believe that GE's pricey appliances would be a tough sell in the U.S. market, where consumer confidence is weak and the housing outlook is dour.
GE announced its intention to sell, spin-off or form a joint venture for its $7.2 billion white-goods business in May, with CEO Jeffrey Immelt later citing Haier, LG, GE's Mexican partner Controladora Mabe, and Turkey's largest majap maker, Arcelik, as possible suitors.
In July, GE broadened the deal to include its entire consumer and industrial division, which includes majaps, lighting and electrical distribution equipment.
No bids for the businesses have been announced.
Reuters said Haier hired McKinsey & Co. in August to evaluate a GE deal, but chose to ignore the consultancy's recommendation to pursue one. While Haier clearly wants GE's appliance assets, unnamed sources told the news service, the gloomy U.S. market as well as difficulty arranging financing compelled the company to puts its plans on hold.
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