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Chinese takeovers of foreign appliance brands likely to continue

(People's Daily Online)    16:04, May 24, 2018

Chinese home appliance manufacturers have drawn global attention over the past few years as they have made frequent moves to acquire foreign brands.

In 2004, Chinese multinational electronics company TCL acquired French brand Thomson's TV business, becoming the first Chinese household appliance manufacturer to complete an overseas acquisition.

Seven years later, China’s Haier bought Japanese rival Sanyo’s appliance business, and then took complete control of New Zealand appliance maker Fisher & Paykel in 2013.

The latest move of this kind was made by Hisense, one of China’s leading home appliance creators, who recently acquired over half of Slovenian manufacturer Gorenje's company at a price of 290 million euros.

What's indicated by the latest acquisition, insiders point out, is that Chinese takeovers are not likely to come to an end soon.

Overseas acquisition by Chinese appliance enterprises peaked in 2016. This year, Haier bought General Electric Appliance for $5.58 billion, and Chinese electrical appliance manufacturer Midea Group also declared its acquisition of the German robotics creator Kuka for 4 billion euros.

Insiders analyzed that such takeovers are made on a strategic level after substantial research and negotiations, rather than merely jumping on the bandwagon.

They said that to buy out overseas brands is the most efficient way to expand the international market for emerging Chinese appliance makers who have accumulated a sufficient cash flow over recent years.

Based on the trends and speed of recent acquisitions, insiders predict that acquiring reputable overseas brands will be a way for Chinese enterprises to seek a global presence in the short term.

“To expand international deployment is an urgent need of Chinese appliance makers, so they will continue to stay positive toward overseas acquisition,” said Guo Meide, vice president of All View Cloud, a Beijing-based consultancy specializing in home appliances. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Bianji, Hongyu)

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