HONG KONG/FRANKFURT: Chinese firms Joyoung and Gree Electric are among those eyeing the domestic appliances business of Dutch conglomerate Philips’ in a deal worth up to 3 billion euros ($3.6 billion), people with knowledge of the matter said.
Philips’ advisers have sent out teasers to potential buyers, said two of the people, adding the bidding process will start later this year.
Chinese white goods producers Haier and Midea have also shown interest in the business, the people told Reuters, adding some of them are working with investment banks on a potential bid.
Their interest comes even as Chinese white goods companies have faced heightened regulatory scrutiny of their acquisitions in Western nations.
Philips announced in January a plan to carve out its domestic appliances business, which produces coffee machines, vacuum cleaners and airfryers and generated 2.3 billion euros in sales in 2019.
The company’s spokesman said on Thursday preparations for any transaction are ongoing and that they expect to start engaging with interested parties in the fall and have a deal in the third quarter next year.
JPMorgan and Goldman Sachs are working on the planned divestment, he added, declining to comment on the Chinese suitors.
When contacted by Reuters, Joyoung’s investor relations office said it was not aware of the situation, while Gree’s investor relations office declined to comment. A Haier spokeswoman declined to comment, while Midea did not respond to requests for comment.
The people declined to be named as the information is confidential.
Chinese white goods companies have been acquiring marquee assets overseas in the last few years.
Haier bought General Electric’s appliances business in 2016 for $5.4 billion. It is now the world’s biggest maker of household appliances.
Midea’s $5 billion acquisition of German robotics maker Kuka that year raised concern in Germany about losing key technology and led to its tightened screening of foreign investors.
In 2016, Philips’ plan to sell its lighting businesses to a group of Asian buyers was rejected by the United States on security grounds as the consortium included Chinese firms.
Philips said in its second-quarter report the domestic appliances business recorded a double-digit decline in sales due to COVID-19. It estimated total separation costs of the business to be in the range of 120 to 140 million euros.
($1 = 0.8457 euros)
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