Haier Smart Home plans Hong Kong listing to take $7.7bn unit private

The Haier group was founded in 1984 by Chinese businessman Zhang Ruimin. (Reuters)
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Updated 12 December 2019

Haier Smart Home plans Hong Kong listing to take $7.7bn unit private

  • Haier Smart Home would offer minority shareholders in unit Haier Electronics Group newly issued Hong Kong stock for their shares
  • Haier Electronics makes and sells appliances such as washing machines

HONG KONG: Haier, the world’s biggest maker of household appliances, is planning a major restructuring that will see its main unit Haier Smart Home list in Hong Kong to take another group company valued at $7.7bn private, two people with direct knowledge of the matter said.
Under the deal, Haier Smart Home, formerly known as Qingdao Haier and already listed in Shanghai, would offer minority shareholders in unit Haier Electronics Group newly issued Hong Kong stock for their shares, they said.
Financial advisers have been hired to work on the deal, which would give Haier Smart Home access to cash at Haier Electronics, the sources said, declining to be identified as negotiations were private.
Haier Electronics, which makes and sells appliances such as washing machines, held about 20bn yuan ($2.8bn) in cash and short term investments as of end-June, according to Refinitiv.
One of the sources added the plan was also part of the Haier group’s efforts to streamline its overseas operations.
Haier Smart Home currently owns 45% of Haier Electronics and unlisted parent Haier Group Corp. holds 12%, while minority shareholders include Vanguard Group, Norges Bank Investment Management and BlackRock, according to Refinitiv data.
The plan is still preliminary and would be subject to regulatory approval, the sources said, adding that the aim was to complete the deal in the second half of next year.
A representative from Haier Smart Home’s investors relations office said the team was not aware of the plan. Haier Group and Haier Electronics did not respond to requests for comment.
The Haier group was founded in 1984 by Chinese businessman Zhang Ruimin who built up a small loss-making factory into a major consumer brand. Major acquisitions have included New Zealand appliances brand Fisher & Paykel in 2012 for NZ$927 million and the $5.6bn purchase of General Electrics’ appliances business in 2016.
Haier Smart Home, which has a market value of some $15.4bn, also listed in Germany last year — the first listing of a Chinese company under the D-share program aimed at increasing foreign investment in Chinese firms.
Hong Kong-listed companies have announced a record 24 take-private deals this year, often citing uncertain market conditions or undervalued shares as reasons for the deals.

A homegrown UAE brand bets on date’s heritage appeal

Updated 29 February 2020

A homegrown UAE brand bets on date’s heritage appeal

  • Dates are locally sourced by The Date Room from around 20 farms in the Al Ain oasis area of Abu Dhabi
  • UAE farms grow about 475,000 tons of dates a year, a significant percentage of which is exported

DUBAI: When you can answer the classic business question about a unique selling proposition (USP) in six different ways, you likely have a successful product on your hands.

Thankfully, when you are dealing with dates, unusual product features are not a problem.

There are more than 3,000 date varieties around the world, but Emirati brand The Date Room is approaching the sticky business of breaking into an established market with just half a dozen local cultivars.

From the buttery, caramel notes of the golden Kholas date to the lower-carbohydrate Razaiz type, their flavors offer a change from the more commonly available Medjool and Deglet Noor varieties.

Being locally sourced from about 20 farms in the Al-Ain oasis area of Abu Dhabi, they are also introducing UAE residents to the nation’s heritage.

“Emirati dates are unique because they’re generally much richer in taste and texture than others on the market — although they can be smaller in size,” said Tony N. Al-Saiegh, executive director of The Date Room.

The Date Room launched with two luxury boutiques in the UAE last November after founder Ahmed Mohamed bin Salem spotted a gap for local fruit in a market dominated by produce from Saudi farms.

While official market share by origin data is not available, Saudi dates may control close to 90 percent of the UAE’s retail market.

Yet, with an annual production of 755,000 tons, Saudi Arabia trails Egypt, Iran and Algeria, all of which produce in excess of a million tons each year, according to the UN Food and Agriculture Organization.

By contrast, UAE farms grow about 475,000 tons, a significant percentage of which is exported.

Dates are among the world’s oldest cultivated crops. The palm is native to the Middle East, North Africa and South Asia, with origins that go back more than 5,000 years to what is modern-day Iraq.

The appeal of dates has grown considerably in recent years. Their high fiber and mineral profile have led to their classification as a superfood, they have been used for their high natural sugar content in healthy natural alternatives to processed candy bars.

“The Date Room’s main initial motive was the fact that our own farms produce a superior quality of date in every way,” Al-Saiegh said.

“Our families have been enjoying these dates with every meal and occasion for generations, so why not introduce it to the market in a way that makes them available to everyone but also promotes the unique culture of the UAE?”

The company’s annual production runs to about 160 tons.

For now, distribution is restricted to the UAE, but Al-Saiegh says his team is in talks with distributors in India and Indonesia.

With farmers everywhere agonizing over the impact of climate change, what are the challenges facing date farmers, accustomed as their crops are to heat and aridity?

Scientists expect 2019 to be the second-hottest year on record after 2016, and they forecast that by 2070, today’s major producers will suffer from a markedly unsuitable climate.

Despite palm trees being able to tolerate the heat for hundreds of years, Al-Saiegh says his farms are already feeling the impact.

“As the weather gets hotter and the summers get longer, it’s drying out farms and (arable) land. This means more water is required because a lack of water affects the size and texture of the fruit,” he explains.

While the full impact of those changes is some years away, the Abu Dhabi government has focused on conserving the UNESCO World Heritage oasis where the UAE’s dates are grown.

On the other hand, given the way technology has transformed the local agricultural sector with solutions such as vertical, indoor and soilless farms, Al-Saiegh may soon be able to add another distinguishing feature to The Date Room’s USP.

• This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.