KKR takes $550m stake in China’s Haier

The firm will invest in the publicly-listed home appliance maker to take advantage of China’s increasing domestic consumption.

Kohlberg Kravis Roberts has announced it will acquire a 10 percent stake in China-based home appliance manufacturer Qingdao Haier, according to a company statement.

Financial terms were not disclosed. However, a Reuters report put the deal at $550 million, citing a source familiar with the matter.

It is unclear whether the investment will come from Asia Fund II, the $6 billion vehicle the firm closed earlier this year. 

The deal was KKR's second China investment in a week  In September, KKR and CDH Investments entered into a $140 million joint venture with their former portfolio company China Modern Dairy to build large-scale dairy farms in China, PEI reported earlier. The deal marked KKR's first majority investment in China and was made from its China Growth Fund, not Asia Fund II. 

Qingdao Haier has domestic market leadership positions in categories such as refrigerators, washers, air-conditioners and water heaters, according to the statement, citing figures from China Market Monitor.

“Qingdao Haier is one of the most respected Chinese companies with a market leading position, an outstanding historical track record and an outstanding management team,” said David Liu, CEO of KKR Greater China, in the statement. 

“We look forward to fully utilising KKR’s global resources and local expertise to assist Qingdao Haier in its next phase of growth by capitalising on the opportunities created by China’s continued urbanisation and increasing consumer income trend, while also accelerating its international expansion.”

Qingdao Haier is listed on the Shanghai Stock exchange. It has $8.85 billion in total assets and $2 billion in shareholder’s equity, according to the statement. In 2012, revenues were $13 billion and net income was $534 million.

KKR made its first deal from Asia Fund II last month when it announced the purchase of 80 percent of the the healthcare until of Japan's Panasonic in a deal worth JPY 165 billion (€1.24 billion; $1.67 billion), PEI reported earlier.