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Haier to Buy Rest of F&P Appliances for $564 Million

China’s Haier Offers to Buy F&P Appliances for $564 Million
The purchase would extend the overseas expansion of Haier Group, the unlisted parent of Hong Kong-listed Haier Electronics Group Co. and Shanghai-listed Qingdao Haier Co. Photographer: David Paul Morris/Bloomberg

Haier Group offered to buy the rest of New Zealand’s Fisher & Paykel Appliances Holdings Ltd. for NZ$695 million ($570 million) as China’s biggest appliance maker boosts international distribution and manufacturing capability.

Haier, the refrigerator maker’s largest shareholder with a 20 percent stake, offered NZ$1.20 a share in cash for the rest, according to an e-mailed statement. Haier had indicated it planned for more investment in the company, Fisher & Paykel Chairman Keith Turner said in a Bloomberg TV interview today.

The purchase would extend the overseas expansion of Haier Group, which has a plant in South Carolina, by adding F&P’s manufacturing bases in the U.S.. Italy, Mexico and Thailand. The deal can help boost Haier’s distribution channels, said Alex Yeung, a Hong Kong-based analyst at Kim Eng Securities HK Ltd.

“The offer is quite attractive,” Yeung said. “It’s Haier’s long-term strategy to increase exposure overseas. They probably feel there is market potential to drive sales.”

Haier also has research, design and development centers in Germany and Italy.

Fisher & Paykel’s shares rose 12 percent to NZ$1.165 as of 2:56 p.m. in Wellington. The Haier offer is 60 percent higher that the closing price on Sept. 7, the last day before the company disclosed Haier was considering a bid.

The company has told investors to take no action on the offer as it considers the bid.

Market Share

Auckland-based F&P gets 40 percent of sales from Australia, 30 percent in its home market and 16 percent in North America, according to data compiled by Bloomberg. It had the second-largest market share in refrigeration appliances in Australia last year with 24 percent, after Electrolux AB which has 28 percent, according to data from London-based Euromonitor. Haier Group ranked fifth with a 5.5 percent share.

Haier Group, the unlisted parent of Hong Kong-listed Haier Electronics Group Co. and Shanghai-listed Qingdao Haier Co., bought 20 percent of Fisher & Paykel in 2009 and said it planned more acquisitions and alliances to expand its brand.

Qingdao Haier has been suspended from trading in Shanghai since yesterday, while Haier Electronics dropped 0.9 percent to HK$9 in Hong Kong at 11:25 a.m.

Any sale will have to be approved by the New Zealand government, Turner said, adding he didn’t see any “particularly major impediments” to that process.

The offer is attractive for Fisher & Paykel shareholders, “given market volatility, recent economic uncertainty and the competitive nature of the global white goods sector,” Liang Haishan, president of Haier White Goods Group, said in yesterday’s statement.

Fisher & Paykel’s second-largest shareholder, Allan Gray Australia Pty Ltd., has accepted Haier’s proposed offer, Liang said.

Fisher & Paykel said Sept. 10 it allowed Haier to undertake “limited” due diligence, giving it access to part of a five-year strategic plan.

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