Reliance Industries has positioned itself as the key contender to acquire a stake in Haier’s India operations, according to media reports. Haier is a Chinese electronics manufacturer looking to assert its position in the Indian market with the right strategic ally for itself. This development has led to a competitive scenario between Reliance Industries and a group of companies, including Sunil Mittal of the Bharti group, looking for similar interests.
Haier currently stands in the third position in the Indian electronics market after LG and Samsung. The company is looking to structure itself similarly to MG Motors, where an Indian company holds the principal position. The company has decided to reduce its share by 25 per cent, to 51 per cent.
Many Chinese companies are willing to reduce their shares, and let the Indian companies lead to maintain their foothold in the market. This trend comes due to Donald Trump’s stringent tariff policies.
According to an ET report, Haier has engaged with Citi to let it connect to various family offices and private equity funds in India for stake acquisition. The company is looking for a valuation of $2-2.3 billion, which includes a control premium.
Last year, Sunil Mittal formed a group with Warburg Pincus. However, the competition includes several other groups such as TPG with the Burman family of Dabur, Goldman Sachs with the Amit Jatia family, and GIC of Singapore collaborating with BK Goenka of Welspun, following their initial alliance with Uday Kotak. The partnership between Punnet Dalmia’s family office and Bain Capital has taken a step from the offer.
Reliance has recently come into the picture after initial non-binding proposals were submitted earlier this year. The reports suggest that their representatives have directly contacted Haier’s main office in Qindango. It also mentioned that Mittal has recently visited China to meet the decision makers of Haier