Haier Group, China's largest home appliance maker, said on Monday that it preferred organic growth to continue its rapid overseas expansion, but would consider an acquisition if the right opportunity arose. Haier had looked into the possibility of buying General Electric Co's appliance unit when the US giant put the unit up for sale in May, Li Pan, the general manager of the group's overseas promotion division, told Reuters.
But Haier's global strategy is to expand overseas under its own brand and not through acquisitions, he said, in an interview at the Diaoyutai Hotel, the group's hospitality centre for the just concluded Olympic Games. "Our aim is to forge the Haier brand globally and that definitely will not be changed," said Li, whose company was a domestic sponsor of the Beijing Games.
"We'll never give up that goal." Currently, almost all of the group's sales are under the Haier brand, a strategy that downplays overseas acquisitions, but does not rule them out, he said. "If an M&A opportunity would help us to consolidate resources and reduce costs to meet our customers' needs, we'll definitely consider it."
Analysts generally agreed, however, that Haier would have needed substantial state-backed funding to seriously consider a move on GE's appliance arm, a unit that is larger than Haier's two listed companies combined sales.
GE's appliance unit last year had sales of $7.2 billion - making it worth an estimated $4-$8 billion, according to analysts - exceeding about $5.4 billion in sales recorded by the Chinese group's two listed firms over the same period. In a change of direction, GE said last month it would look to spin off its entire consumer and industrial unit, more than doubling the size of any potential sale.
Haier group, which includes Qingdao Haier Refrigerator Co and Haier Electronics Group Co, was focusing on the rapidly expanding overseas market which could account for two thirds of total sales within five years, said Li.
"In order to achieve that goal within five years, we must work very hard," said Li. "But it also depends to a large degree on the opportunities presented by the market." Haier, whose product range includes refrigerators, air-conditioners and freezers, had almost no overseas presence a decade ago, but now relies on markets outside of China for a quarter of total sales.
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