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Haier Group, China's largest home appliance manufacturer, has withdrawn from the contest to acquire US firm Maytag Corp.
The third largest appliance maker in the United States, Maytag said on its corporate website on Tuesday that it had received a letter from Haier America Trading and its partners, Bain Capital Partners LLC and Blackstone Management Associates.
It stated that "they have determined not to further pursue the transaction to acquire the outstanding shares of Maytag."
The US$16 per share bid on June 21 from the consortium led by Haier was topped earlier this week by Whirlpool's US$17 offer. Whirlpool's total bid was US$1.37 billion.
Maytag's board will meet later this week to decide if it wants to pursue Whirlpool's offer, according to sources.
In May, an investor group led by Ripplewood, a New York-based private equity firm, submitted a bid to buy Maytag for US$1.1 billion, or US$14 a share.
A month later, the investor group of Haier, Bain and Blackstone offered a US$1.28-billion bid, valuing Maytag at US$16 per share. Maytag immediately said it would consider the bid.
Haier, based in east China's Shandong Province, declined to comment on the withdrawal, saying the firm "cannot provide any information at the current stage."
Neither Blackstone nor Bain could be reached for immediate comment.
Wei Huawei, a senior consultant with Beijing Fore-sight Innovation Consulting Co Ltd, said it would be a pity and a big loss if Haier lost the deal.
He said the successful purchase of Maytag would give Haier - already a household name in its home market - instant brand recognition in overseas markets where it has been trying to expand.
Wei pointed out that Haier's acquisition attempt was "too cautious and too slow."
"In the past, it (Haier) insisted too much on using its own brand in overseas markets. In 2000, it established its own fridge factory in South Carolina in the United States, and started producing mini-refrigerators under its own brand.
But when it started to diversify its product line in the US market, it found that there was very little room left for the brand," Wei said.
Maytag is a US$4.7 billion home and commercial appliance company focused on North America and certain international markets.
Its brands include Maytag, Hoover, Jenn-Air and Amana. It is the third-largest US appliance maker, behind Whirlpool and General Electric.
Meanwhile, although Haier seems to have dropped out of the Maytag deal, a Chinese oil firm still has hope for an acquisition in the United States.
The China National Offshore Oil Company Ltd (CNOOC) said yesterday that its bid for the US oil firm Unocal Corp is still superior even after the Chevron Corp raised its own offer for the US oil company.
A spokesman with the CNOOC Ltd said in Beijing that he got the news that the Unocal board of directors had recommended shareholders accept the increased Chevron offer from the official Unocal website.
But he added: "We still think our full-cash offer is superior even after Chevron raised its bid." According to the Unocal website, Chevron raised its offer by US$2 per share late on Tuesday to US$63.01.
The offer, 40 percent cash and 60 percent stock, will be a total of more than US$17 billion.
The CNOOC Ltd, China's largest offshore oil producer, claimed on June 23 that it has proposed a merger with Unocal, offering US$67 in cash per Unocal share, a total of US$18.5 billion.
With an increasing number of Chinese enterprises going abroad, more and more of them are participating in global acquisition campaigns.
Successful cases include computer maker Lenovo's purchase of IBM's PC business and TCL Multimedia's purchase of the TV-making assets of France's Thomson.
(China Daily July 21, 2005)
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