- Air-conditioner maker sees synergies from Yinlong acquisition
- Purchase made with government's environmental push in mind
Gree Electric Appliances Inc. Chairman Dong Mingzhu said the company is venturing into electric-car manufacturing to support the Chinese government’s push to clean up the environment and promote greener technologies.
China’s largest air-conditioner maker said this week it plans to buy Zhuhai Yinlong New Energy Co., an electric-vehicle manufacturer, through a share sale and will release more information on April 4. Gree plans to buy 100 percent of Yinlong, Dong said in an interview in Beijing at the National People’s Congress, without giving a value for the purchase.
“The decision was made with the premier’s work report target to have blue skies, green pastures and clear water,” Dong said, referring to Premier Li Keqiang’s report to the legislature that listed the government’s priorities for the year. “One of Gree’s biggest strengths is in developing its own key parts and not relying on buying from others. Buying Yinlong will create synergies and their resources will help us grow quickly.”
China has designated new-energy vehicles a strategic industry as part of a broader push to upgrade its manufacturing sector. Electric vehicles also would curtail tailpipe emissions that contribute to worsening air pollution in major cities. To encourage their adoption, the government has given companies and consumers subsidies and grants and pledged support for charging stations.
Yinlong, which started manufacturing batteries for electric vehicles in 2009, has a line of seven electric passenger cars and 18 electric buses, according to its website. Gree gets about 85 percent of its revenue from manufacturing air conditioners and parts. It sells two out of every five air-conditioners in China, according to data from Euromonitor International.
— With assistance by Tian Ying