CEO, Haier America, Inc.
DATE:July 15, 2008
It is ironic and coincidental this memo comes on the heals of the massive Anheuser-Busch/InBev acquisition. The leak of our interest in GE Appliance by Wall Street Journal blog “Deal Journal” has not sullied our position or interest. It is strongly recommended Haier begin to line up financing for an asset purchase of GE Appliance. Louisville, KY-based GE Appliance is an attractive acquisition target for Haier. As the US market continues to be brand driven, Quingdao Haier (and Haier America) is looking at its best chance to move full steam into the US market. Haier has showed initial success moving into niche areas of the US market through compact refrigerators and air-conditioners. The acquisition of GE Appliance, a 101-year old titan in the U.S. white goods industry will fulfill Haier CEO Zhang Ruimin’s belief that “All success relies on one thing in overseas markets—creating a localized brand name. We have to make Americans feel that Haier is a localized U.S. brand instead of an imported Chinese brand. The acquisition of GE Appliance will not be a quick, slam dunk in the U.S. market. Haier will not be able to simply slap a Haier sticker on a GE product. Haier will not be able place a GE sticker on a Haier product. To fully take advantage of the opportunity, Haier must be strategic about the rollout of the acquisition, significant changes to the GE brand and the homogenization of brands. Bringing GE Appliance under the Haier umbrella may remove some of the substantial roadblocks to getting top tier retailers and “big-box” stores to market Haier products. Bringing GE Appliance under the Haier umbrella may help alleviate the stigma Haier endures as a Chinese import. Haier is no slouch in the global white goods market. To be clear, Haier boasts incredible volume. However, Haier’s...