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)
