DEALTALK-Haier's GE unit buy highlights growing China M&A maturity
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By Denny Thomas
HONG KONG Jan 27 (Reuters) - In the lead up to General Electric Co's appliance unit auction, Haier Group did something Chinese bidders have rarely dared to do in a competitive global M&A deal.
While informal discussions centered around a bid of $4.2 billion, people familiar with the matter told Reuters, Haier submitted a knock-out $5.4 billion binding offer, moving decisively to trump at least six other bidders including South Korea's Samsung Electronics, China's Midea Group and Turkey's Arcelik.
Haier's swift, bold move bore all the hallmarks of a seasoned, well-prepared M&A player and underscored how Chinese buyers are becoming increasingly confident about their ability to clinch deals within tight timeframes.
Howard Yu, professor of strategic management and innovation at IMD in Geneva, said after years of domestic consolidation China's state and private companies had joined the "big boys" in global M&A.
"Such trend has been encouraged by central government... but the domestic industry has also been consolidated to a point that foreign players increasingly look like the only plausible targets," Yu said.
For Chinese bidders who had earned a reputation among Western bankers for being hobbled by regulations, politics and fuzzy decision-making, Haier's ability to seal such a deal in a month marked a significant step.
And with slowing economic growth at home and a weakening yuan, the move of Chinese corporations overseas is set to accelerate, according to bankers and experts. Continuación...