Kolkata|Mumbai: China's Haier is looking for a strategic local partner in India, similar to the strategy employed by MG Motor, which has tied up with JSW Group.
This stems from heightened scrutiny by Indian regulators and government agencies on Chinese companies, apart from slow approvals of all investments from that country, under Press Note 3 norms.
Haier Appliances India is the third-largest appliances company in the country after LG and Samsung.
The company is working with its global advisor, Citi, to reach out to Indian groups that don't have a competing business.
While Haier has told potential suitors that it is looking to dilute up to 25%, the people cited above said this could go as high as 49%. A joint control mechanism-with the Indian partner as the single largest shareholder and a local management as a precursor to a local listing-is also likely to be on the table, the people said. Haier didn't respond to queries.
Cos with Similar Biz a No No
The Chinese company that entered the country in 2003 is hopeful of striking a deal at a premium, benchmarking its business operations to LG Electronics India’s expected valuation ahead of a planned IPO.
It’s been reported that the South Korean company is looking to raise $1-1.5 billion next year, valuing LG Electronics India at $13 billion.
However, most executives expect a valuation of $2-2.2 billion for Haier, half of what the company is said to be quoting, predominantly on account of its Chinese parentage.
The consumer electronics manufacturer is not keen on partnering groups that have a competing business to avoid conflicts of interest, thereby ruling out Tata, Godrej or even Reliance Industries as of now, said the people cited. It’s also looking at entities that have the ear of policy makers, to help expedite growth and ringfence local operations and Chinese employees.
“Haier wants a strategic Indian partner who is not in the durables business but will help them to deal with the bureaucratic maze and in political corridors, considering the geopolitical tensions between India and China,” an industry executive said. “It wants to speed up approvals and investment. Financial investment or liquidity in the Indian entity is not the main criteria—it is a profitable operation that is growing in India.”
Make in India
Ahmedabad-based Torrent Group, Dabur and Sajjan Jindal’s JSW Group are diversifying fast and have been exploring unique investment options or alliances in sectors such as financial services, retail, real estate, automobiles, sports and entertainment. For instance, Torrent bid for Reliance Capital and is eyeing the Gujarat Titans Indian Premier League (IPL) cricket franchise, while the Burman family of Dabur is in a takeover battle at Religare and had made a strong pitch for Coca-Cola's bottling operations in India.
Billionaire businessmen such as Sunil Mittal, Sunil and Pawan Munjal, Gautam Adani, Uday Kotak, Azim Premji and Infosys chairman NR Narayana Murthy have well-established family offices that are making bold bets.
This stems from heightened scrutiny by Indian regulators and government agencies on Chinese companies, apart from slow approvals of all investments from that country, under Press Note 3 norms.
Haier Appliances India is the third-largest appliances company in the country after LG and Samsung.
The company is working with its global advisor, Citi, to reach out to Indian groups that don't have a competing business.
While Haier has told potential suitors that it is looking to dilute up to 25%, the people cited above said this could go as high as 49%. A joint control mechanism-with the Indian partner as the single largest shareholder and a local management as a precursor to a local listing-is also likely to be on the table, the people said. Haier didn't respond to queries.
Cos with Similar Biz a No No
The Chinese company that entered the country in 2003 is hopeful of striking a deal at a premium, benchmarking its business operations to LG Electronics India’s expected valuation ahead of a planned IPO.
It’s been reported that the South Korean company is looking to raise $1-1.5 billion next year, valuing LG Electronics India at $13 billion.
However, most executives expect a valuation of $2-2.2 billion for Haier, half of what the company is said to be quoting, predominantly on account of its Chinese parentage.
The consumer electronics manufacturer is not keen on partnering groups that have a competing business to avoid conflicts of interest, thereby ruling out Tata, Godrej or even Reliance Industries as of now, said the people cited. It’s also looking at entities that have the ear of policy makers, to help expedite growth and ringfence local operations and Chinese employees.
“Haier wants a strategic Indian partner who is not in the durables business but will help them to deal with the bureaucratic maze and in political corridors, considering the geopolitical tensions between India and China,” an industry executive said. “It wants to speed up approvals and investment. Financial investment or liquidity in the Indian entity is not the main criteria—it is a profitable operation that is growing in India.”
Make in India
Ahmedabad-based Torrent Group, Dabur and Sajjan Jindal’s JSW Group are diversifying fast and have been exploring unique investment options or alliances in sectors such as financial services, retail, real estate, automobiles, sports and entertainment. For instance, Torrent bid for Reliance Capital and is eyeing the Gujarat Titans Indian Premier League (IPL) cricket franchise, while the Burman family of Dabur is in a takeover battle at Religare and had made a strong pitch for Coca-Cola's bottling operations in India.
Billionaire businessmen such as Sunil Mittal, Sunil and Pawan Munjal, Gautam Adani, Uday Kotak, Azim Premji and Infosys chairman NR Narayana Murthy have well-established family offices that are making bold bets.
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