Fulfilling an American Dream

[Randy W]

. . . from Caixin

 

With GE Deal, Haier Fulfills an American Dream

The pending takeover of GE Appliances by China's Haier Group follows a 15-year quest for a respectable share of the U.S. market

A US$ 5.4 billion deal for General Electric's home appliance division is about to jettison China's largest appliance maker, Haier Group, into a long-dreamed-for, high-end market in America.

The sale, announced in mid-January but now awaiting regulatory approval and a green light from Haier's directors, would end the Chinese company's lengthy quest for a respectable U.S. market share – a quest that dates to 1999, when it broke into the U.S. market with a brand of low-end mini-refrigerators.

By snapping up GE Appliances, which manufactures a wide range of white goods, from freezers to dishwashers, Haier plans to quickly expand its share of the U.S. market, where its previous market share stood at only 2 percent. Annual U.S. sales could grow more than 10-fold, as GE Appliances posted US$ 5.9 billion in revenues in 2014 compared with Haier's U.S. sales of US$ 500 million.

. . .

Haier's bid apparently topped offers from South Korea's Samsung Electronics and LG, Turkey's Arcelik A.S., and Chinese appliance maker Midea Group.

. . .

"The U.S. dollar is likely to rise more, so it's reasonable for Haier to spend US$ 5.4 billion."

. . .

The Fisher & Paykel takeover proved that Haier can integrate its Chinese way of doing business with a foreign company's culture in terms of decision making, product research and sales.

"Western companies usually have unified standards for decision-making," said Zhou. "But Chinese companies depend more on an individual executive's decisions and apply different standards."

 

 

Edited March 3, 2016 by Randy W (see edit history)