Blackstone and Haier Plan to Bid for GE Unit

From Paul Dobson, ShanghaiDaily.com   2008-8-11

Blackstone Group LP will join Haier Group Corp to bid for General Electric Co's appliances unit and build a global business to compete with Electrolux AB, Britain's Sunday Telegraph reported, citing unidentified people.

GE's auction of the unit, which is being managed by Goldman Sachs Group Inc, may also attract competitors, including South Korea's LG Electronics Inc, the newspaper reported yesterday.

Haier Group Corp, China's largest maker of refrigerators and air conditioners, early this month said it was looking at GE's appliance arm and other "opportunities" as it seeks acquisitions overseas.

"Haier will make an assessment on the possibility" of acquiring the GE division, Zhang Tieyan, chief executive officer for Asia outside of China, said on August 1. "Haier is open to any such opportunity."

GE Chief Executive Officer Jeffrey Immelt in May identified Haier and Korea's LG Electronics Inc as potential suitors for its appliance unit.

A purchase of the century-old division would give Haier, which sells products through Wal-Mart Stores Inc, Best Buy Co and Home Depot Inc, a household name to help its United States expansion, Bloomberg News said. Haier, based in Qingdao, Shandong Province, "is focusing more and more on overseas markets" where sales rose 25.8 percent in 2007, more than a 16.5-percent increase in group sales, Zhang said. The group had total sales of US$15.2 billion last year.

The GE unit, the biggest provider of refrigerators, ovens and dishwashers for newly built US homes, may fetch US$3 billion to US$8 billion, according to estimates from Citigroup Inc and Goldman Sachs Group Inc.

Haier Group, the unlisted parent of Hong Kong-listed Haier Electronics Group Co and Shanghai-listed Qingdao Haier Co, pulled out of a bid for Maytag Corp in 2005. Whirlpool Corp bought Maytag in 2006, to create the world's biggest appliance maker.