Whirlpool A Gleam In Midea CEO’s Eye

Is another major Chinese acquisition afoot?
By Alan Wolf ,

One way to grow offshore share overnight is to buy an indigenous competitor.

That’s how Haier Group jumpstarted its U.S. white-goods business, through its $5.4 billion purchase of GE Appliances.

Now another Chinese powerhouse has a leading American appliance maker in its sights. Midea Group, a $23 billion majap business founded 49 years ago in Guangdong, China, apparently has its eye on Whirlpool and its checkbook in hand.

In an interview with Bloomberg, Midea chairman/CEO Paul Fang acknowledged that “We would be interested to take a look” at America’s largest white-goods manufacturer, as well as Sweden’s Electrolux AB, “if suitable opportunities arise.”

The appliance giant already has a foothold in the U.S. with Midea America, a $500 million OEM and branded business (and TWICE VIP Award winner) that operates a massive R&D facility in Louisville, Ky.

Fang said it would be at least a year before it made a move, following its $4.3 billion acquisition of German robotics business Kuka in December 2016. Nonetheless, Midea is “adequately positioned for more large-scale acquisitions,” he told Bloomberg, with about $8 billion of cash and equivalents on hand and a market cap of $50 billion.

The Fortune 500 company lays claim to the title of world’s largest majap maker, with 21 production facilities and 260 logistics centers in more than 200 countries and 100,000 employees to operate them. It specializes in HVAC systems, but says it’s the world’s No. 1 air treatment brand, supplying one-fifth of all ACs sold in China.

Midea also manufactures refrigeration, laundry, cooking and floor care products, as well as countertop appliances, water heaters and lighting.

Whether Whirlpool shareholders would approve the merger, and federal regulators allow a foreign entity to buy the largest U.S. business in a major consumer goods sector, is open to speculation.

But few products are more American than Budweiser beer – which is now owned by global brewer AB Inbev. So drink up Whirlpool, this Fang’s for you.   

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