Chinese buying spree accelerates with takeover of GE unit

BEIJING -- Haier Group, the world's biggest home appliance maker, is buying General Electric Co.'s appliance business for $5.4 billion to expand its U.S.

See Full Article

and global presence.

The acquisition announced Friday comes as Haier tries to transform itself into a premium brand. GE is shifting emphasis from traditional businesses such as appliances, in which it has been a prominent presence for more than a century, to higher-technology areas such as medical equipment and clean energy.

The two companies also agreed to form a strategic partnership to co-operate in areas such as the Internet, healthcare, and advanced manufacturing. They said the sale is subject to regulatory and anti-trust approvals in relevant countries.

The purchase is the third in a string of multibillion-dollar foreign acquisitions this week by Chinese buyers.

On Tuesday, conglomerate Wanda Group said it was buying Hollywood's Legendary Entertainment for $3.5 billion. The previous day, a state-owned chemical company announced the purchase of a German manufacturer for $1 billion.

Chinese companies are on a buying spree abroad, looking for technology and brands to improve their competitive position at home and speed their global expansion.

Chinese buyers have announced 23 outbound acquisitions so far this year, totalling $12.3 billion, up from $2.9 billion in the same period last year, according to Dealogic, a financial information provider.

Haier, headquartered in the eastern Chinese city of Qingdao, makes a wide range of refrigerators, washing machines and other home appliances. It reported 2014 revenue of $32.6 billion. It operates a string of 21 industrial parks worldwide.

Its purchase of GE Appliances is the biggest global corporate acquisition so far this year and the third-biggest in the United States by a Chinese buyer to date, according to Dealogic.

Haier said the GE acquisition would be carried out by its unit Qingdao Haier Co. Ltd., a publicly traded entity of which Haier owns 41 per cent.

GE Appliances, headquartered in Louisville, Kentucky, reported $5.9 billion in 2014 revenue. It has 12,000 employees, 96 per cent of them in the United States.

The two companies said the deal will give GE Appliances more access to the growing Chinese consumer market. The purchase includes GE Appliances' 48.4 per cent stake in Mabe, a Mexican appliance company with which it has operated a joint venture for 28 years.

"This strategic alliance provides a new starting point for both Haier and GE and I am confident that this partnership will deliver enhanced value to the stakeholders of both companies," Haier Group chairman Zhang Ruimin said in a statement.

Zhang is credited with building Haier out of a bankrupt refrigerator factory after he was assigned by the Qingdao city government to manage it in 1984.

Haier's takeover of GE Appliances is the second-biggest purchase in the household appliance sector on record, behind Panasonic Corp.'s 2008 purchase of 50 per cent of Sanyo Electric Co. for $7.1 billion, according to Dealogic. It said Haier's six foreign acquisitions to date total $6.3 billion.

"Haier has a stated focus to grow in the U.S., build their manufacturing presence here and to invest further in the business," GE chief executive Jeff Immelt said in the joint statement. "In addition, we see the opportunity to work together to build the GE brand in China."

GE, headquartered in Fairfield, Connecticut, announced plans earlier to sell the appliance business to Sweden's Electrolux for $3.3 billion. They called that off in December after opposition from American anti-trust regulators.


Latest Economic News

  • Tickets without barcodes: Concert venues experiment with new systems

    Economic CBC News
    When fans score tickets for events at the Burton Cummings Theatre in Winnipeg in the future, they might notice the absence of a familiar feature: that ubiquitous zebra-styled inventory tracker bar that adorns almost every retail product imaginable. Source
  • The dirty truth about makeup and the oil change debate: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Don't panic. CBC's Marketplace rounds up the consumer and health news you need. Want this in your inbox? Get the Marketplace newsletter every Friday. Internet prices dialing up Your internet bill could get even more pricey. Source
  • After overcharging for bread, should Loblaws demand ID for a $25 gift card?

    Economic CBC News
    Jenn Iskiw says she'll be grocery shopping elsewhere after feeling betrayed by Loblaws — twice. First, for artificially inflating the price of bread for 14 years, and second, for demanding she send ID to get a $25 gift card offered as compensation for bread price fixing. Source
  • Facebook suspends data analytics firm that worked for Trump campaign

    Economic CBC News
    The Massachusetts attorney general said on Saturday her office was launching an investigation after reports that Cambridge Analytica had harvested private information from more than 50 million Facebook users in developing techniques to support U.S. President Donald Trump's 2016 election campaign. Source
  • Trump's goal of 'energy dominance' could change the global balance of power

    Economic CBC News
    Fuelled by technological breakthroughs and cuts to taxes and regulation, the United States is on target to become the world's biggest producer of crude oil in the next five years. Let that sink in. The U.S will be bigger than Russia and Saudi Arabia. Source
  • How to avoid spending money on unnecessary oil changes

    Economic CBC News
    Oil changes are by far the most common service performed on vehicles in Canada. Customers pay quick lube facilities, private garages and dealer maintenance centres well over a billion dollars a year for the service. But a CBC investigation finds many of us may be changing our oil far more often than automakers require. Source
  • Trans Mountain protester arrested, one day after court grants injunction

    Economic CTV News
    BURNABY, B.C. -- Burnaby RCMP say they arrested a woman who chained herself to a work truck Friday morning, one day after the B.C. Supreme Court granted Trans Mountain an injunction against demonstrators. Just before 8 a.m. Source
  • Enbridge, TransCanada shares flat after steep dive due to U.S. tax ruling

    Economic CTV News
    CALGARY -- Shares in Canadian pipeline companies Enbridge Inc. and TransCanada Corp. failed to recover fully Friday from a steep sell-off on Thursday after the U.S. said it would eliminate a tax break for owners of certain interstate pipelines. Source
  • WestJet union drive helped by unhappiness with pay formula, says flight attendant

    Economic CTV News
    MONTREAL -- A WestJet flight attendant says rules that effectively pay starting workers less than minimum wage because they're compensated only for time in the air is helping shore up support for a union drive at Canada's second-largest airline. Source
  • Sask. premier blasts 'mind-boggling' rail backlog of grain shipments

    Economic CTV News
    REGINA -- Saskatchewan Premier Scott Moe says it's mind-boggling that grain shipments have been delayed again by rail backlogs this year. Moe told the Saskatchewan Association of Rural Municipalities on Friday that this is the second time in four years that grain shipments have been delayed. Source