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Home >> Business
UPDATED: 12:40, June 16, 2005
China's Haier considers bid for Maytag
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China's leading home appliance maker Haier Group is considering making a bid for Maytag Corp, one of the top three home and commercial appliance companies in the United States.

"Haier Group is closely monitoring matters concerning the Maytag sale, but until now there hasn't been any decision on it," Haier's spokesperson Ji Guangqiang said.

But he did not give further details.

More than 100 years' old, the Newton, Iowa-based Maytag is worth US$4.7 billion and offers a full line of washers, dryers, dishwashers, and refrigerators under brand names like Maytag, Hoover and Jade.

The company got into trouble due to rising raw material costs, a shrinking market share and competition.

The company had agreed last month to be taken private by equity investment company Ripplewood Holdings in a US$2.1 billion deal, the Financial Times had reported.

It can look for other bidders within 30 days after the deal, which makes bidding possible until the end of this week.

Maytag shares on the New York Stock Exchange have risen 5.9 per cent this week on speculation it may receive a higher offer.

"The possible bidding is in line with Haier's global strategies," said Chen Yuanwang, an industry analyst from China Securities.

As a leading white goods producer globally, Haier is still not strong enough in the US, compared with rivals like Whirlpool, Siemens and LG. Its products mainly target the low- and medium-end market.

"With a good established name and, especially, well-developed marketing and sales networks, the purchase of Maytag would give Haier an edge in the US market," Chen said.

Haier considers the US a key market and started production there in 2000.

Haier's intention to buy Maytag also indicates that more and more companies are planning to explore the overseas market through mergers and acquisitions, he said.

China National Offshore Oil Corp is considering launching a bid for Unocal, a US energy group.

Lenovo Holdings bought IBM's PC business for US$1.25 billion.

"Acquiring foreign companies is a shortcut for domestic enterprises to fulfil their global layout," he said.

But there are also risks, he warned.

TCL, another leading home appliance maker in China, went into loss after it acquired the Thomson TV business last year.

"How to integrate and restructure its business will be important after the purchase," he said.

Source: China Daily


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