Mainland consortium loses out on Grundig TV brand
Three Chinese companies have lost their bid to acquire one of Europe's most famous television brands, in a development that will delay their plans to become global manufacturers.
An investment group jointly owned by Turkish television company Beko and British home electronics group Alba signed an agreement to purchase the core home electronics business of Grundig for about GBP55 million (HK$783.74 million), said Siegfried Beck, who is overseeing Grundig's bankruptcy proceedings.
Several Chinese companies including Haier Group, Konka, Changhong and Xinjiang Delong were competing for Grundig. All declined to comment on the setback.
Grundig's most attractive asset is its brand, the Achilles heel of Chinese manufacturers who last year produced 43 million colour television sets - more than any other country - but have no global brand. Grundig also has a network of more than 20,000 sales outlets across Europe.
The lack of global brands is a problem faced across all of China's export sectors, forcing many firms to produce for foreign companies which reap most of the profit.
Delong president Benny Li said the firm was interested in Grundig because it was more economic for Chinese firms to buy existing brands than build their own. 'Haier is spending a lot of money building its own brand. But Chinese prices are associated with cheap prices. Foreign brands with Chinese input costs offer good profit margins,' Mr Li said.
Four years ago, Delong bought Murray, a leading American lawnmower and bicycle maker, with US$400 million in financing provided by GE Capital. Last July, it purchased the 728 line of jets from Fairchild Dornier, a German aircraft manufacturer that went bankrupt.
Delong's strategy is to retain Fairchild Dornier's marketing, distribution and research and design operations abroad, while transferring most of the manufacturing to China to cut costs.
Similarly, in September 2002, TCL purchased German electronics company - Schneider, which went bankrupt in early 2002, with three production lines able to produce 10 million televisions a year. The TCL purchase prompted Delong, Konka, Haier and Chang Hong to approach Grundig.
After Grundig filed for bankruptcy in April last year, administrators initially tried to find a buyer for the entire company. When that failed, they decided to split it into different units, selling its multimedia systems to United States car parts maker Delphi Corp and its office communications unit to German investment company Induc.
It was its core television and video unit that was acquired by the Turko-British joint venture.
Beko belongs to Arcelik, one of Europe's biggest appliance manufacturers and part of Turkey's Koc Group.
