Links guides Carlyle on Haier investment

Carlyle Group has agreed to invest $137m (£89m) through convertible bonds and warrants into Haier Electronics, a subsidiary of China’s largest white goods maker Haier Group.

The deal provides Haier with extra flexibility for strategic investments in the next few years. In return, Carlyle will hold a 9 per cent stake in the listed company.
It is the second time a major US private equity firm has invested in a ­Chinese electronics retail business.

In 2009 Kirkland & Ellis advised Bain Capital on its $412m investment in Hong the Kong-listed Gome ­Electrical Appliances, which was advised by Sidley Austin.

The DLA Piper team ­acting for Haier was led by Hong Kong-based partner Jeffrey Mak, while Link­laters’ Carlyle team was led by partners Peggy Wang and Christopher Kelly.

“The deal may be ­regarded as innovative, especially in terms of ­realising the needs of both parties in the context of the rapidly changing domestic consumption industry in China,” said Mak. “Chinese companies have been increasingly using their Hong Kong-listed entities to raise funds from foreign investors.”

Haier Group has been eyeing international ­expansion and domestic M&A recently. It is ­reportedly planning to list its entire white goods ­business in Hong Kong, with DLA Piper on standby to provide advice.