DEALTALK-China's Haier plays waiting game for GE unit
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By George Chen
SHANGHAI Oct 22 (Reuters) - Haier, China's largest home appliance maker, plans not to bid for General Electric Co's (GE.N: Cotización) appliances unit until it sees clear signs of a U.S. market recovery, said people with direct knowledge of the matter.
A bid for GE's appliances business, which the U.S. giant put on the block in May, could be Haier's last opportunity to buy a household U.S. brand, part of its ambitions to reach global consumers rather than just Chinese.
With sales of $7.2 billion last year, the unit is worth an estimated $4 billion to $8 billion, analysts have said.
However, after Haier hired McKinsey & Co in August to evaluate a possible GE deal, officials including Chief Executive Zhang Ruimin made their minds clear to wait and not bid yet, said the sources, who declined to be named given the sensitivity of the matter.
"We're certainly interested in the GE assets but we just can't see any clear sign of when the U.S. markets, in particular its real estate market, can recover," said one of the sources, a senior Haier executive.
"And we don't know where the bottom is. I guess nobody can really tell," he added.
In a McKinsey report submitted to top management in August, the consultants suggested Haier should bid for the GE appliance business for several reasons, including the potential of the U.S. consumer market, the sources said. Continuación...