Haier to Take 20% Stake in New Zealand Company
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By REBECCA HOWARD
WELLINGTON, New Zealand -- Haier Group will purchase a 20% stake in Fisher & Paykel Appliances Ltd. in a roughly US$50 million deal that will help raise Haier's profile in the global home appliances market and bolster both companies' ambitions to grow outside of their home countries.
The companies said the deal will give Haier exclusive rights to sell Fisher & Paykel appliances in China, while its New Zealand counterpart can exclusively sell Haier's products in Australia and New Zealand.
The deal also allows Fisher & Paykel to avoid a potential call on funds from its bankers.
Pressured by fierce competition and rising costs in the home market, Haier, China's biggest home appliance maker, has adopted a proactive approach on overseas expansion in recent years to drive future growth. But it has encountered stumbling blocks in penetrating the important U.S. market. It lost to Whirlpool Corp. in acquiring U.S. appliance maker Maytag Corp. in 2004 and last year it dropped a bid for General Electric Co.'s appliances unit due to the global economic slowdown.
In 2007, Haier made small acquisitions for individual factories in markets such as India and Thailand as part of its strategy to base production closer to its customers.
"The deal will allow Haier to share the marketing, and research and development resources of Fisher & Paykel in the high-end whiteware market," Haier said.
The Auckland-based appliance maker said it would raise a minimum of 189 million New Zealand dollars (US$118.2 million) through a NZ$46 million initial placement to Haier Group, and a fully underwritten NZ$143 million pro-rata renounceable rights issue. It will then carry out a top up placement to Haier of NZ$12 million to ensure a shareholding of 20%.
Haier's total investment in the company will be between NZ$80 million and NZ$82 million.
The partnership "gives us a unique opportunity to fully globalize Fisher & Paykel Appliances and really drive our global expansion into parts of the world that had previously been very difficult for us to penetrate," Fisher & Paykel Chief Executive John Bongard said in a conference call with analysts.
