Haier Group Co. (Qingdao, China), a major Chinese conglomerate, has announced it is dropping out of the bidding competition for Maytag Corp. (Newton, Iowa). The announcement came just days after The Whirlpool Corp. (Benton Harbor, Mich.), the nation’s largest manufacturer of home appliances, announced an unsolicited $1.36 billion bid for the $4.7 billion company, the third-largest supplier in the industry.
Still regarded as having the inside track is Ripplewood Holdings (New York), a private equity firm, which signed an agreement with Maytag two months ago for a $1.13 billion acquisition deal.
Bain Capital Partners LLC and Blackstone Management Associates IV L.L.C., private equity firms that were backing the Haier deal, sent Maytag a letter stating that they have determined not to further pursue the transaction.
Haier is China’s largest appliance maker of refrigerators and freezers, air conditioners, dishwashers, microwaves, televisions, vacuums, mobile phones, computers and more. It exports goods to more than 160 countries.
Maytag has been struggling, bothered in recent years by a growing number of aggressive, low-cost Asian rivals. Analysts have considered it a prime takeover candidate for some time because of its heavy cost structure, lack of sales growth and sharply declining profitability. The company posted a loss of about $9 million on sales of $4.7 billion last year.