China's leading home appliances 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.
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.
Rising raw material costs, a shrinking market share and
competition led the company last month to agree to be taken private
by equity investment company Ripplewood Holdings in a US$2.1
billion deal, the Financial Times had reported.
The agreement allows it to 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
percent this week on speculation that?it might receive a
higher offer.
"A possible bid 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.
And Lenovo Holdings bought IBM's PC business for US$1.25
billion.
"Acquiring foreign companies is a shortcut for domestic
enterprises to fulfill their global layout," he said.
But there are also risks, he warned.
TCL, another leading home appliances maker in China, suffered a
loss after it acquired the Thomson TV business last year.
"How a company integrates and restructures its business is
important after the purchase," he said.
(China Daily June 16, 2005)