Chinese Businesses Scavenge US Industry For Brands

Today United States regulators from the "Justice" department gave China based Haier permission to buy General Electric's appliance unit. General Electric's efforts to escape the low margin appliance business have become public knowledge twice before. The first effort failed to find any credible buyers. Following that, last year "Justice" Department regulators refused permission for Swedish firm Electrolux's to unburden General Electric of this line of business by acquiring it for 3.3 billion United States dollars. They expressed concern about the poverty of suppliers for wall mounted ovens and cooktops for commerical use in the United States. Now Haier, which already markets appliances for sale in the United States, has received approval to acquire this business line from General Electric for 5.4 billion United States dollars.

The mechanics of various Preet Bhararas in the "Justice" Department approving one deal and not the other, or why the United States feels the compulsion to insert them into business dealing are opaque and not sanely intelligible. Haier's motivation in this deal appears to be abundantly clear. They are acquiring the ability to market their products in the United States using a brand consumers buy out of sheer intertia merging their relative production advantage over General Electric with the kind of brand loyalty and recognition that only General Electric could squander.

General Electric claim to be refocusing towards higher margin heavy industrial products, but it remains to be seen how long inertia can carry them in that business.

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