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Last Updated: Wednesday, 15 June, 2005, 16:40 GMT 17:40 UK
Chinese fridge maker eyes Maytag
Maytag headquarters in Newton, Iowa
Maytag is struggling to cut costs
Haier Group, a Chinese fridge and washing-machine maker, is considering sparking a bidding war for Maytag, the US firm that makes Hoover cleaners.

The group, whose slogan is 'Haier and higher', issued a statement that it was "very interested in events surrounding Maytag", Reuters news agency reported.

Maytag agreed to a $1.13bn (670m) offer from US investment group Ripplewood Holdings in May.

But the deal gave Maytag until 18 June to seek other buyers.

Several US private equity groups are also exploring a bid for Maytag, including Bain Capital, Blackstone and Kohlberg Kravis Roberts, the Financial Times reported.

Haier said it "has not yet made an decision" on whether to try to buy Maytag.

American icon

Maytag is a 102-year-old US company whose best-known brand internationally is the Hoover cleaner but - for US shoppers, at least - it has been linked with many iconic household products.

Haier's US plant in Canton, South Carolina
Haier invested $30m to open a plant in South Carolina

Iowa-based Maytag was founded as a farm-implements company, making its first washing machine in 1907. By the mid-1920s it was selling one in five of all washing machines bought in the US.

In the past year, falling profits have led to 1,100 job cuts as higher steel prices and competition from abroad hit sales.

State-owned Haier began in a bankrupt fridge factory in 1984, and now distributes its fridges in the US through Wal-Mart and Home Depot, concentrating on smaller 'beer-cooler' style fridges.

It was named China's most valuable brand by Forbes in 2004, and employs about 30,000 people.

Looking outwards

Several Chinese firms are pushing to build international brands by buying struggling parts of big-name firms.

Lenovo bought IBM's PC operations, the most ambitious such deal so far, while mobile phone maker TCL bought Alcatel's mobile phone business, and Thomson's TV business.

Maytag's deal with Ripplewood includes a wipe-out of $975m of Maytag's debt and a break-up clause of $40m.

The prospect of a bidding war pushed up Maytag's shares on Wednesday.




SEE ALSO:
Hoover-maker leaves Wall Street
20 May 05 |  Business
Exports surge fuels China growth
15 Jun 05 |  Business
EU and China agree textile pact
10 Jun 05 |  Business
China PC firm aiming for top spot
10 May 05 |  Business
Wildfire Chinese growth persists
20 Apr 05 |  Business


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