Haier said it plans not to bid for General Electric Co's appliances unit until it sees clear signs of a U.S. market recovery, according to a Reuters report.
A bid for GE's appliances business, which the U.S. giant put on the block in May, could be Haier's last opportunity to buy a household U.S. brand, part of its ambitions to reach global consumers rather than just Chinese, the report said.
With sales of $7.2 billion last year, the unit is worth an estimated US$4 billion to $8 billion.
In May, GE's CEO Jeff Immelt named companies including Haier, South Korea's LG Electronics, and Turkey's Arcelik ARCLK.IS as possible bidders for the second-largest U.S. appliance maker after Whirlpool Corp. No formal bids have been announced yet, and the plans of the other possible bidders could not be immediately ascertained.
According to the Reuters report, a source who worked with Haier executives to evaluate the potential GE deal said the other concern for Haier is how to pay for it, as Haier would rather not borrow from commercial banks.
Haier Group is unlisted, but controls two listed arms -- Shanghai-listed Qingdao Haier Refrigerator Co. and Hong Kong-listed Haier Electronics Group Co.
The most likely option to finance a bid is to team up with private equity investors such as Bain Capital or Blackstone Group, the Reuters report said, although agreement on terms and conditions for a joint bid may be difficult in the short term. (Reuters)
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