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China's Haier poised to take over Fisher & Paykel

WELLINGTON, New Zealand -- Chinese home appliance giant Haier Group on Thursday announced it is poised to complete a takeover bid for the small but well-regarded New Zealand manufacturer Fisher & Paykel Appliances after sweetening an earlier offer.

The takeover bid will not be finalized until Haier receives regulatory approval and completes all the share sales. Haier announced on Thursday it had finalized agreements to buy a total of 51.6 percent of the company, over the 50 percent threshold needed to gain control. The Chinese company boosted its initial offer of NZ$1.20 per share to NZ$1.28. The offer values Fisher & Paykel at NZ$927 million ($761 million).

The move will allow Haier to gain a valued brand as well as technology pioneered by the New Zealand company. Fisher & Paykel has been applauded for its washing machine engines and its popular line of dish-drawer dishwashers. The move will likely give Haier more access to markets where Fisher & Paykel has a strong presence, including New Zealand, Australia and the U.S.

Haier already owned 20 percent of the company after investing in it in 2009 during the global financial crisis. The next largest shareholder, Allan Gray Australia, had agreed to the initial offer, giving Haier control of 37.5 percent of the company. On Thursday, three more shareholders announced they would accept the increased offer. They are New Zealand's Accident Compensation Commission, which holds a 7.2 percent stake, AMP Capital Investors, which holds a 4.5 percent stake, and Harbour Asset Management, which holds a 2.4 percent stake.

Haier had first invested in Fisher & Paykel in 2009 during the global financial crisis. Fisher & Paykel had gotten itself into financial difficulties due to its large debts and a plunge in sales.

Haier's initial offer last month of $1.20 per share represented a 60 percent premium on the pre-offer closing price. But Fisher & Paykel directors this month recommended shareholders reject that offer, citing an independent valuation report that concluded the company was worth between NZ$1.28 and NZ$1.57 per share.

The directors on Thursday recommended remaining shareholders accept the new offer.

On Thursday morning, the New Zealand stock market suspended trading in Fisher & Paykel pending an announcement. The shares last traded at NZ$1.23 1/2.

Many New Zealanders are mourning the loss of control of a homegrown brand that began 78 years ago and grew to represent a rare manufacturing success story. The company's stoves, refrigerators, washing machines and dishwashers became ubiquitous in New Zealand homes, while innovations such as its dish-drawer dishwasher found a niche in the U.S. But the company struggled in recent years against tough market conditions and a high New Zealand dollar.

The companies have progressively worked more closely together since Haier bought its 20 percent stake. Fisher & Paykel began marketing some of Haier's products while Haier began using some of Fisher & Paykel's engines.

Haier said earlier it doesn't plan any immediate cuts to the workforce of either company as a result of the planned takeover.