The offer was 14 per cent higher than an earlier bid by US buyout firm Ripplewood Holdings. The Haier offer values Maytag at US$16 a share, against Ripplewood's US$14. Haier has also reportedly agreed to assume Maytag's debt of US$979 million.

If the bid succeeds - and pending the outcome of CNOOC's unsolicited US$18.5 billion offer for Unocal - it will be the most significant Chinese manufacturing corporate deal of the year.

For Haier, one of China's most international companies, it is easy to see the benefits of the acquisition. With one deal, it would become the fourth-biggest player in the US home appliance market and find itself within striking distance of the top three players - Whirlpool, General Electric and Electrolux.

It would also obtain a company that has a 102-year history, has been listed on the New York Stock Exchange since 1925 and whose brands - Hoover, Amana, Maytag and Jenn-Air - are household names.

Maytag's high-end models - their quality made famous by the company's 'lonely' repairman mascot - would complement Haier's existing product line. Maytag's North American production assets would provide Haier a degree of insurance against future anti-dumping actions or other restrictions imposed on Chinese-made goods.

Haier's aggressive globalisation began in 1996. Today it has 30 factories and eight design centres in markets including Malaysia, Indonesia, Bangladesh, Pakistan, Iran, Jordan, Tunisia and Italy. These overseas factories accounted for 50 per cent of Haier's US$2 billion overseas sales last year.

Haier is also well established in the US, with a US$40 million plant in Camden, South Carolina. It controls 30 per cent of the market for refrigerators of less than 200 litres in size and boasts a corporate headquarters in the 81-year Greenwich Bank building in central Manhattan, which it acquired in 2001 for US$14.5 million.

That is the good news. But the bad news is that Maytag, based in Newton, Iowa, comes with high costs.

Of Maytag's 14 plants, 12 are in the US and it buys most of parts and components there. By comparison, 31 of Whirlpool's 41 factories are outside the US.

Maytag also has strong unions, namely the United Autoworkers and the International Association of Machinists and Aerospace Workers, who will resist plans to move production abroad.

Last year, Maytag posted a net loss of US$9 million on revenues of US$4.72 billion, against a net profit of US$120.1 million on revenue of US$4.79 billion in 2003. An 80 per cent slump in first-quarter profits forced its shares down 25 per cent to a 14-year low.

Maytag blames the losses on rising raw-material and energy costs, and competition from low-cost countries, especially in Asia.

Maytag has no production in Asia, having withdrawn from a five-year joint venture with Rongshida, a big white goods maker in Hefei, Anhui province, in 2002. The venture made a profit for the first two years but lost heavily for the next three because of intense competition from domestic makers.

The logic of a takeover is that Haier would be able to close some of Maytag's North American plants and shift production to lower-cost countries, while retaining the company's brand, and sales and distribution system.

Haier, however, has no experience of taking over a large and well-established western firm, especially one with a history and corporate culture alien to what mainland managers of state-owned enterprises are familiar with.

If it acquires Maytag, Haier would also become the owner of a company listed in New York, and subject to relentless analyst and media scrutiny. In China, by contrast, Haier is a national champion with strong support from state banks and a docile press.

In its advertising, Haier tends to feature cute children. Whether they will get along with Maytag's grumpy old repairman remains to be seen.