Gree Electric 15% stake up for bids at RMB 44.17 per share, value over USD 5.6 bln
Aug 14, 2019 (China Knowledge) - Gree Group, the parent of Gree Electric Appliance (000651), began accepting bids yesterday for the firm's 15% stake in the subsidiary. The parent's 15% stake in the Chinese air conditioner giant will be priced at no less than RMB 44.17 per share, valuing the deal at least RMB 39.9 bln. The planned per-share price amounts to 15% discount on Gree Electric's current trading price of RMB 52.
Gree Group is a state-owned enterprise supervised by the Assets Supervision and Administration Commission (SASAC) of Zhuhai local government. As of Dec. 31, 2015, the company owned just 18.22% state of Gree Electric, but able to control its board of directors. The two entities also shared the same chairwoman Dong Mingzhu until Nov.2016. At present, Gree Group is the largest shareholder of Gree Electric.
Gree Electric is a Chinese major appliance-maker and the world's largest residential air-conditioner manufacturer. The company offers two types of air conditioners, including household air conditioners and commercial air conditioners. The company has worked on diversifying its business and entering fields such as mobile phones, automobiles, and microchip production. Despite the firm's effort, air conditioner sales still make up for about 80% of its total annual revenue.
The Zhuhai government behind Gree Group decided to divest its holdings in Gree Electric as the appliance-maker has sought to march into diversified areas which leads to the fall of the company's air conditioner market share.
According to Gree Electric's statement, Gree Group will accept tenders until Sept.2 under the current timetable. Bidding candidates are required to provide “strategic assets” such as effective technology or marketing expertise.
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