Haier had a 1.1 percent share of the USA appliance market previous year, according to Euromonitor.
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The GE appliance business drew offers from suitors including China’s Midea Group Co., people with knowledge of the matter said in January.
In its press release, Haier promised to continue investment in the United States.
“Haier is committed to investing in the USA”, he continued.
In seeking a fresh buyer, GE executives wanted “a better deal” than they had gotten from Electrolux, one source told the Journal.
GE said it was spending $1 billion to expand and modernize its Appliance Park, introducing lean manufacturing with an improved plant layout and ergonomics. “This transaction underscores Haier’s devotion to creating a global platform for innovation, which will benefit both Haier and GE Appliances and deliver enhanced value to all stakeholders”.
The company has been mostly present in the highly competitive, so-called “value segment” of the USA market and analysts expressed concern about the impact its bigger presence would have on the pricing dynamics.
The deal, announced on Friday, brings together two companies that are the second-largest players in their respective home markets. Haier also tried to buy the Maytag Corp.in 2008, but was outbid by Whirlpool Corp.
It began with the sale of its tertiary business units, like the financial services, so as to enable General Electric Company (NYSE:GE) to focus on developing its core business units of Industrial manufacturing and Data Analytics.
The deal will give Haier ownership of a century-old business that makes refrigerators, freezers, clothes washers and dryers under brands such as Monogram, Café, Profile and Artistry.
The deal with Haier is expected to close in mid-2016. It will also sharpen its credibility in the USA, where “Chinese brands are perceived as low quality”, said Klaus Meyer, a business professor at China Europe International Business School in Shanghai.
This is not the first acquisition for Haier, a Chinese company whose name comes from a onetime German partner.
Haier could also gain entree to the ultra-premium market through GE’s luxury Monogram badge, as the deal includes long-term GE Appliance brand access.
Haier beat other foreign corporate bidders vying to buy GE’s Louisville, Kentucky-based business, the WSJ said.
However, officials said the four-year contract to which GE and the local workers agreed last year will be renegotiated once Haier takes possession of the business, which is subject to shareholder and regulatory approvals.
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Kate Linebaugh contributed to this article.
