China’s Haier Investing in New Zealand Company

June 1, 2009

Haier, one of China’s flagship enterprises among it’s overseas consumer electronics and whiteware makers recently entered the New Zealand business scene last week, and by buying into the local debt-laden Fisher & Paykel Appliances with 20% stake.

In today’s re-structuring global society, where countries like China, Singapore and some of the Middle Eastern countries are holding a lot of foreign exchange reserves, moves like this are likely to occur with greater frequency.

As most Western nations currently find themselves heavily indebted at a corporate level, public level, and household level, many European company who are currently struggling with the current situation and find themselves highly in debt might attract investments or buy-ins from Chinese or Middle Eastern companies who use their healthy cash-flow to obtain rich resources, technical know-how and traditional brands with great equity to bargain conditions.

“The Haier and Fisher & Paykel tie-up is the first one we’ve seen over here but it certainly is a trend where some of these wealthier cashed up nations are able to take opportunity of the downturn and capitalise some of these Western countries,” says Lister, Head of research at ABN Amro Craigs New Zealand, according to a report by TVNZ. He says further that similar moves by Asian investors have also been seen recently in the US, where investors have been buying stocks from some of the large banks as they were re-capitalising. Also the Chinalco investments in the Australian mining sector and Rio Tinto comes to mind, says Lister.

There’s general consensus that the Fisher & Paykel Appliances transaction will have a positive outcome and will help to put the balance sheets of the New Zealand company in order, Lister says.

We at SinoGate expect to see similar moves more frequently in the next months to come. Stay update to the latest news and information around Chinese outbound investments, major overseas projects and business opportunities.

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