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)
Short Url
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.


UK retail sales shoot past pre-virus levels as shoppers migrate online

Supermarkets such as Sainsbury’s have avoided many of the problems plaguing the rest of the retail sector amid the coronavirus pandemic. (Reuters)
Updated 19 September 2020

UK retail sales shoot past pre-virus levels as shoppers migrate online

  • Britain suffered the biggest economic hit of any G7 economy between April and June, when output fell by more than 20 percent

LONDON: British shoppers continued to increase spending last month, taking sales further above pre-COVID levels, as strong online demand helped much of the sector enjoyed a faster rebound than the rest of the economy.
Retail sales volumes rose by 0.8 percent in August, the Office for National Statistics said — slightly above the average 0.7 percent forecast in a Reuters poll — and, compared with a year earlier, they were up 2.8 percent, just below forecasts of 3 percent annual growth.
British retail sales had already overtaken pre-COVID levels in July and now stand 4 percent higher than before the crisis.
However, the rebound masks a sharp split between online and high-street retailers, with online and mail order retailing up 34.4 percent on the year in August, while many traditional retailers outside the grocery sector have suffered reduced footfall.
“Clothing stores continued to struggle, with sales still well below their February level. Overall, the switch to greater online sales means the high street remains under pressure,” ONS deputy national statistician Jonathan Athow said.
The crisis in traditional retailing is having a knock-on effect for commercial landlords, with many stores closing and tenants such as clothing chain New Look seeking to renegotiate rents to link them to turnover.

FASTFACT

British retail sales now stand 4 percent higher than before the crisis.

Clothing sales rose by 13.5 percent on the month, but are still 15.5 percent down on the year.
Grocery sales rose just 0.4 percent in August, after strong growth in previous months when British people had eaten at home more.
August saw a temporary government promotion for dining in restaurants, named “Eat Out to Help Out,” which earlier industry data suggested had dented grocery demand.
The Bank of England (BoE) said on Thursday that Britain’s economy was on course to recover faster than it had forecast in August, but, even so, output in the July-September period is expected to be 7 percent lower than in the final quarter of last year.
Britain suffered the biggest economic hit of any G7 economy between April and June, when output fell by more than 20 percent.
The BoE identified consumer demand as one of the brighter spots, but said it was vulnerable to an upsurge in COVID-19 cases as well as an increase in unemployment when the government’s temporary job support program ends next month.