Haier, the Chinese appliance manufacturer, and the family owners of Candy have announced a deal to “combine their operations”.
Under the agreement, Haier will invest €475 million (£421.7m) as part of ambitious plans to expand in Europe and post-deal closing its new European headquarters will be based in the Candy Group’s head office in Brugherio, Italy.
Haier said the investment was an “important milestone” in its global business strategy, as it seeks to leverage Candy’s innovation capabilities and leadership in “intelligent” household appliances.
It revealed at the IFA trade show in September that it planned to spend at least $1 billion increasing its brand presence in Europe over the next four years and raise the money through an initial public offering in Germany.
Liang Haishan, chairman of the board of directors of Qingdao Haier, said: “In the era of IoT [internet of things] and leveraging its strong R&D capabilities, Candy Group is dedicated to applying network technologies to traditional home appliances, which perfectly aligns with Haier’s “eco-brand” strategy.
“We believe this transaction marks the beginning of a successful strategic cooperation between Haier and Candy Group, which will not only unlock the potential of the smart-home appliance market, but also inspire the sector to continue to upgrade in order to improve customer experience.”
Candy chief executive Beppe Fumagalli and his brother Aldo, a Candy director, said: “We look forward to joining Haier. Qingdao Haier and Candy share the same vision, which is to continue to improve the quality of family life.
“We believe that Candy’s innovation capabilities and Italian design, technology and style will fit perfectly with Qingdao Haier’s operating model. Together, we will better meet the increasing demands for more individualised products and make people’s lives better and easier.”
The transaction is expected to complete by early 2019. It is still subject to regulatory filings, approvals and other customary conditions with relevant domestic and foreign government authorities.
JP Morgan acted as exclusive international financial adviser to Qingdao Haier, while Goldman Sachs acted as exclusive financial adviser to Candy.
Haier, a global Fortune 500 company, owns six global brands, including Haier, GE Appliances, Fisher and Paykel and AQUA.
According to Euromonitor, a global market research institute, 2017 marked Qingdao Haier’s ninth consecutive year as the world’s largest domestic appliance brand in terms of global sales.
Once the deal is done, Haier’s house of brands will include Candy, Hoover, and Rosières in France.
Haier said it would continue to invest in Candy’s brands and aim to achieve “global synergies”.
The move is another sign that Chinese manufacturers are increasingly looking to Europe to grow. Hisense bought Slovenian manufacturer Gorenje at the end of June.