Slovenia white goods manufacturer Gorenje Group has chosen Chinese household appliance group Hisense Electric Co as the favoured bidder to become its strategic partner.
The independent European appliance supplier revealed it received three binding offers from Asian companies bidding to acquire 50% or more of Gorenje in the partnership deal. But it refused to name the firms, promising a news update on 15 May after reviewing the bids.
However, local media citing unofficial sources reported the bidders were Chinese household appliance makers Haier Group Corporation and Hinsense Electric Co., both based in Qingdao, Shandong province, and Heifei Meiling Co. of Heifei Shi, in eastern Anhui province.
Then, in a brief statement on 9 May, Gorenje of Velenje, Slovenia declared Qingdao, China-based Hisense Electric the winner after the top two bidders were asked to improve on their respective offers.
“Gorenje management board has assessed the received offers, as well as the improved offers, together with its financial and legal advisors and with the key shareholders active in the process,” stated the group.
It added that criteria considered in making the decision included the feasibility of the transaction, “the strategic elements which were the basis for initiating the strategic partnership process” and the price per share offered.
Hisense Electric was selected after offering €12 per share subject to its acquisition of 50% + 1 share of Gorenje shares in the takeover procedure, Gorenje revealed. The enhanced bid is reported to value the European appliance maker at around €293m.
Hisense Electric has committed to “launching a takeover intent within 15 days and to a takeover offer in accordance with the statutory deadlines”, stated Gorenje.
In March, Velenje, Slovenia-based Gorenje reported a drop in profit of 84% for 2017 blamed on strong competition and high production costs. It has been forced finally to seek a partner in a sector where consolidation has ruled for several years.
The independent group, one of Slovenia’s biggest exporters, last year launched its search for a strategic partner to help it gain access to key distribution channels and strengthen its brand power.
In 2016, Japan’s Panasonic Corporation chose not to take over Gorenje, but has retained a 10.7% minority stake in the Slovenian company.
Gorenje’s latest Chinese suitor, an offshoot of state run Hisense Co. Ltd., manufactures electronic goods ranging from washing machines, fridges and air conditioners to laptops, smart phones and televisions. Its shares are traded publicly on the Shanghai Stock Exchange.
Its parent group is understood to have more than a dozen manufacturing plants across China and other units abroad in Hungary, France, South Africa, Egypt, Algeria and Mexico.
Gorenje operates production plants in Serbia, Slovenia and the Czech Republic. Three appliance plants are in Serbia, including those making fridges and freezers at Valjevo and washing machines and dryers in Zajecar.