Sunil Mittal and Warburg Pincus in Exclusive Talks to Buy Haier India Stake
Sunil Mittal and Warburg Pincus in Exclusive Talks to Buy Haier India Stake
A consortium led by telecom mogul Sunil Mittal and US private equity firm Warburg Pincus has entered exclusive negotiations with Chinese consumer appliances giant Haier Smart Home Co to acquire a substantial stake in its Indian arm, Haier Appliances India Pvt Limited.
Deal Structure and Implications
The proposed deal structure suggests that the Mittal-Warburg Pincus combine will pick up a 49% stake, with Haier’s Chinese parent company expected to hold a similar 49% stake. The remaining 2% stake will be held by employees, with both parties exercising joint control over the company. This development is likely to be announced officially later this month.
Why Haier India?
Industry insiders suggest that Haier India is an attractive investment opportunity due to its strong supply chain and healthy market share across various categories. The company’s parent, Haier Group, is a leading global consumer durables company, with Haier being the world’s number one brand in major appliances for the 15th consecutive year.
Investment and Growth Plans
- Haier India reported a 36% growth in revenue to around Rs 8,900 crore in 2024, crossing the billion-dollar sales mark.
- The company expects revenue to cross Rs 11,500 crore in the current year, with plans to grow by Rs 2,000 to 2,500 crore annually.
Market Impact and Future Developments
The potential acquisition has significant implications for the Indian consumer durables market, which is witnessing increased competition among players like Samsung, LG, and Whirlpool. The deal is also expected to pave the way for Haier India’s potential IPO in the next two years.
Other M&A Activity in the Sector
The Haier India stake sale is not the only M&A activity brewing in the sector. Whirlpool Corporation has reportedly roped in Goldman Sachs as the sell-side advisor for the part-stake sale in its listed Indian subsidiary, Whirlpool of India.
The Indian consumer durables market is poised for significant growth, driven by increasing demand and penetration. The proposed acquisition by Sunil Mittal and Warburg Pincus could be a strategic move to capitalize on this trend.
