Reliance on the Race to Obtain Significant Shares in Haier India

According to media reports, Reliance Industries (RIL), headed by Mukesh Ambani, has become a serious candidate for a sizeable share in China's Haier's Indian business. By enlisting a domestic strategic partner, Haier hopes to localise its consumer electronics and appliance manufacturing operations.

Similar to their rivalry in the telecom industry, the move places Reliance Industries up against a group that includes Sunil Mittal of the Bharti Group, among others.

An MG Motors-style structure, in which an Indian business becomes the single largest stakeholder, is one of the plans to dilute 25–51% of equity that Haier Appliances India, which ranks third behind LG and Samsung, has been examining. With a control premium included, it has been aiming for a valuation of $2–2.3 billion.

RIL Advisors Directly Approached Haier’s Headquarters in Quingdao

Following the issuance of non-binding offers at the start of the year, RIL entered the competition. Its advisors have gone straight to Haier's Qingdao headquarters. According to various reports, Mittal also travelled to China a few weeks ago to meet with Haier's top management.

It is acknowledged that the possible acquisition will be carried out through the Reliance retail division. Unlike the others, Reliance is eager to go it alone for the time being. It has been developing its own electronics brand under licensed brands like Kelvinator and BPL. Reliance established the brands Wyzr and Reconnect, both of which have had little success.

Other groups in this battle of billionaires include Goldman Sachs and the Amit Jatia family; TPG and the Burman family of Dabur; and GIC of Singapore and BK Goenka of Welspun, after initially partnering with Uday Kotak.

Bain Capital and Puneet Dalmia's family office, which is part of the Dalmia Bharat Group, have chosen not to participate.

Chinese Firms Eager to Gain Ground in India

If Chinese corporations wish to grow, they are now more receptive to terms that require dilution of their stake in favour of Indian entities. Chinese businesses are keen to expand in India as a result of US President Donald Trump's tariff blitz, which threatens to price their goods out of the American market.

In light of the fact that the majority of Indian companies and private equity firms have indicated that they are unlikely to remain subordinate partners in any alliance, Haier is currently investigating the possibility of diluting 45-48% of its equity to a local partner.

An additional 3-6% will be reserved for Indian employees and local distributors, while the remaining portion will be retained. Since late last year, the company has been collaborating with Citi to access private equity funds and sizable family offices.

According to media citations, the final structure is anticipated to change over the coming weeks. The original list of bidders that submitted a non-binding offer for the Haier India stake did not include Reliance. They just joined the race and have already arrived at Haier headquarters.

They are highly interested because they want to expand their own brand space in electronics, similar to what they are doing with Campa Cola in FMCG (fast-moving consumer goods).