Chinese firms seek to acquire Philips’ $3.6 billion home appliances unit

Chinese firms Joyoung, Gree Electric, Haier, and Midea are among those eyeing to acquire the $3.6 billion domestic appliances business of Dutch conglomerate Philips.

A Philips spokesman said that they expect to start engaging with interested parties in the fall and have a deal in the third quarter next year. Advisers for Philips has sent out teasers to prospective buyers.

JPMorgan and Goldman Sachs are working on the planned divestment, he added.

Some prospective Chinese buyers are working with investment banks on a potential bid.

Philips’ domestic appliances business, which produces coffee machines, vacuum cleaners, and air fryers, generated $2.72 billion in sales in 2019.

Chinese appliances companies, such as Haier and Midea, have faced scrutiny of their acquisitions of Western firms.

In 2016, Haier acquired General Electric’s appliances business for $5.4 billion. It has since become the world’s biggest manufacturer of household appliances.

Midea’s acquisition of German robotics maker Kuka for $5 billion also in 2016 resulted in tighter screening by Germany of foreign investors due to concern about losing key technology.