New Delhi, Dec. 24 -- Warburg Pincus, Bharti to acquire 49% of Haier's India arm

US-based private equity giant Warburg Pincus and Indian business conglomerate Bharti Enterprises have joined hands to pick up a 49% stake in the Indian arm of Chinese appliances maker Haier.

The Haier Group will retain a 49% ownership stake while Haier India's management team will own the remaining 2% stake, the companies said in a press statement. The companies didn't disclose any other financial terms of the transaction.

The deal will help Haier India deepen local sourcing, expand manufacturing capacity, drive product innovation, and accelerate market penetration, the statement said. "The new capital infusion will also enhance Haier India's competitiveness across the entire value chain," it said.

Haier had been looking to sell a stake in its India unit for more than a year. In December last year, VCCircle reported that the Chinese household appliances maker had attracted interest from several Indian companies as well as foreign private equity-style investors for its Indian unit. Other suitors who were reportedly in the race include PE firm TPG with Dabur's Burman family, Goldman Sachs with fast food tycoon Amit Jatia's family, and GIC of Singapore with BK Goenka of Welspun.

Meanwhile, the association between Warburg and Bharti goes back two and a half decades. The PE firm had first invested in Bharti Airtel in 1999 and 2001, before exiting in 2004-2005. In 2017, Warburg bought a 20% stake in Bharti's direct-to-home TV arm. The following year, it invested in Airtel's Africa business.

The Haier deal comes at a time when the Indian government has increased its scrutiny of Chinese investments in the country, especially after a deadly border clash in 2020, and has been looking to boost local manufacturing. This has prompted many Chinese companies to seek Indian partners. Last year, for instance, Chinese automaker SAIC Motor sold a 51% stake in its MG Motor India unit to local investors led by billionaire Sajjan Jindal's JSW Group.

Haier India is said to have achieved annualised growth of approximately 25% in India over the past seven years, with strong growth across product segments and geographies. The appliance maker is targeting a 35-38% growth in revenue in FY26 to Rs 14,500 crore, a company executive told mediapersons earlier this month. It is also preparing an investment outlay of Rs 3,500 crore to set up its third manufacturing facility in the country, the executive said.

Haier began its India operations in 2003. It operates two manufacturing facilities, in Pune and Greater Noida. Its portfolio includes refrigerators, air conditioners, washing machines, TVs, water heaters, microwave ovens and kitchen appliances. It competes with the local units of South Korean conglomerates LG and Samsung, Indian companies such as Voltas and Godrej, Chinese peer Midea, Japanese firms such as Panasonic and Daikin, and the local unit of US-based Whirlpool.

Published by HT Digital Content Services with permission from VC Circle.