Mukesh Ambani and Sunil Mittal: The Next Chapter for Bharti Group
Reliance Industries Ltd (RIL), led by Mukesh Ambani, is emerging as a strong contender to acquire a significant stake in Haier’s Indian operations. The Chinese consumer electronics giant is seeking to enhance its local presence by partnering with an Indian strategic ally. This move has sparked competition between RIL and a consortium that includes Sunil Mittal of the Bharti Group, echoing their ongoing rivalry in the telecom sector.
Haier’s Strategic Shift
Haier Appliances India, currently ranked third in the market behind LG and Samsung, is exploring options to reduce its equity stake from 25% to 51%. The company is considering a structure similar to that of MG Motors, where an Indian entity would take on the role of the principal shareholder. This strategic shift comes in response to changing market dynamics, particularly influenced by Donald Trump’s tariff policies, which have made it more challenging for Chinese companies to compete in the U.S. market. As a result, Haier is more inclined to reduce its stake in favor of Indian partners to ensure continued growth in India.
The company is aiming for a valuation between $2 billion and $2.3 billion, which includes a control premium. Since late last year, Haier has been working with Citi to connect with major family offices and private equity funds interested in acquiring a stake. This proactive approach reflects Haier’s commitment to solidifying its position in the Indian market.
Intensifying Competition
The competition for Haier’s stake is heating up, with several prominent groups vying for a partnership. Last year, Sunil Mittal formed a consortium with Warburg Pincus, while other contenders include TPG, which is collaborating with the Burman family of Dabur, and Goldman Sachs, which has partnered with the Amit Jatia family. Additionally, GIC of Singapore is working with BK Goenka of Welspun, following their initial alliance with Uday Kotak. Notably, the partnership between Puneet Dalmia’s family office and Bain Capital has withdrawn from consideration.
RIL has recently entered the fray after initially submitting non-binding proposals earlier this year. Reports indicate that RIL’s consultants have established direct communication with Haier’s headquarters in Qingdao. Meanwhile, Mittal has made a visit to China to meet with Haier’s senior leadership, underscoring the seriousness of the competition.
Reliance’s Strategic Interests
Sources suggest that Reliance’s retail division is poised to handle the potential acquisition. Unlike other competitors, Reliance is currently opting for an independent approach. The company has been expanding its electronics business through licensed brands such as BPL and Kelvinator, while its own brands, Reconnect and Wyzr, have seen modest success.
As many Indian firms and private equity investors are hesitant to accept minority positions in partnerships, Haier is contemplating allocating 45-48% ownership to a local partner. Additionally, 3-6% of the stake may be reserved for Indian staff and regional distributors, while the remainder would be retained by Haier. The final arrangement is expected to take shape in the coming weeks, reflecting the urgency of the negotiations.
Haier’s Growth Trajectory
Haier, which offers a range of products including refrigerators, washing machines, televisions, and air conditioners in India, reported sales of ₹8,900 crore in the calendar year 2024, marking a 33% increase from the previous year when it began local operations. The company has set an ambitious target of achieving ₹11,500 crore in sales for the calendar year 2025. This growth trajectory highlights Haier’s commitment to expanding its footprint in the Indian market, making the ongoing negotiations for a strategic partnership even more critical.
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